[Congressional Record Volume 159, Number 42 (Thursday, March 21, 2013)]
[Senate]
[Pages S2053-S2141]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CONCURRENT RESOLUTION ON THE BUDGET, FISCAL YEAR 2014
The ACTING PRESIDENT pro tempore. Under the previous order, the
Senate will resume consideration of S. Con. Res. 8, which the clerk
will report.
The assistant legislative clerk read as follows:
A concurrent resolution (S. Con. Res. 8) setting forth the
congressional budget for the United States Government for
fiscal year 2014, revising the appropriate budgetary levels
for fiscal year 2013, and setting forth the appropriate
budgetary levels for fiscal years 2015 through 2023.
Mr. REID. Mr. President, as we just heard, the Senate has resumed
consideration of the budget debate of S. Con. Res. 8, the budget
resolution. We will continue debate during today's session. Senators
will be notified when votes are scheduled, of course.
The budget has 34 hours left, and then following that, we will have
some votes. It is up to the two managers of this bill if we have votes
before the 34 hours expire. These are two experienced Senators and they
know how to handle this budget, but it would seem to me that we should
move as quickly as we can to debate these issues. I hope Senators come
and offer their opinions as to the budget that Chairman Murray has
brought to the Senate floor. Maybe some people will want to talk about
what passed in the House yesterday, the Ryan Republican budget.
Everyone should understand that this time will run out at the latest
at 7 p.m. tomorrow night. It seems to me the two managers could reduce
that time somewhat. If they don't, it doesn't matter; we will be here
until we finish this budget. If we are here all night Friday, we will
be in all night Friday. I spoke to Senator Murray, and she was willing
to be in all night last night; she is willing to be here all night
tonight and all night Friday night until we finish this. We are going
to move forward and finish this budget.
affordable care act
Mr. REID. Mr. President, three years ago this coming Saturday was a
historic time in this country and in the world, actually, because the
Affordable Care Act passed. It was a very wintry night when it passed--
very cold. It was the greatest single step in generations to help the
American people.
This was unique because for the first time--going back to the days of
Harry Truman where he talked about a health care bill for the country,
to Eisenhower, who talked about a health care bill for this country--we
were finally able to accomplish it. We ensured access to quality,
affordable health care for every American with ObamaCare, the
Affordable Care Act.
Millions and millions of Americans, as we speak, are benefiting from
this legislation. Insurance companies can no longer arbitrarily place
lifetime caps on insurance policies during someone's care. No longer
can they suddenly say: Sorry, you have cancer or had that bad accident,
but you reached $1,000--or whatever limit they set, $10,000--and you
are through. Go get help someplace else because insurance is over. That
arbitrary lifetime cap by insurance companies put Americans just a car
accident or an illness away from doom.
[[Page S2054]]
Today children are no longer denied insurance because they were born
with a disease, disability, or some other problem. They no longer are
denied insurance. And being a woman, like my daughter, is no longer a
preexisting medical condition. Before ObamaCare passed--and everyone
needs to understand this--my daughter Lana had a preexisting condition;
she was born a girl. That is gone.
In less than a year, about 130 million Americans with preexisting
conditions such as high blood pressure or diabetes can rest assured
they will have access to affordable insurance and lifesaving care
regardless of their health and how much money they make.
In Nevada alone--a sparsely populated State of some 3 million
people--tens of thousands of seniors have saved tens of millions of
dollars because 3 years ago we filled the doughnut hole. What that
means is they don't have to pay exorbitant prices for their
prescription drug coverage.
Health care reform is not only saving money, it saves lives. In
Nevada there are thousands of examples, but I will give one about a 26-
year-old woman named Sarah Coffey Kugler, a native of Gardnerville, NV.
Gardnerville is a beautiful place next to the Sierra Nevada mountains.
Well, this young lady, who was very smart--and still is--was half way
through her first year of law school at the University of Connecticut
when she was diagnosed with stage 4 Hodgkin's disease. Not stage 1, 2,
or 3, but the worst, stage 4. She had done everything right. She knew
she needed insurance, so she went to the University of Connecticut and
bought the best plan she could for students so she would have health
insurance. Due to her cancer and the difficult treatment to fight it,
she had to drop out of school. She had no insurance because insurance
would not cover her.
As I said, she was no longer a student and, as a result, no longer
qualified for student health insurance. What was she to do? She needed
a bone marrow transplant. She and her family thought there was a very
strong possibility she would pass away.
Before ObamaCare, Sarah would have been one of tens of millions of
Americans who desperately needed lifesaving care but didn't have
insurance to take care of it. Before ObamaCare, Sarah might have even
become 1 of the 45,000 Americans who die each year because they lacked
health insurance. But thanks to the Affordable Care Act, ObamaCare,
Sarah was able to sign on to her parents' insurance policy.
Sarah is 1 of 3.1 million young people in America--approximately
35,000 in Nevada--who have benefited from a law that allows children to
stay on their parents' health plans until they are 26 years old.
Sarah's story has a happy ending, as so often happens in America
where we can get health care. She got the treatment she needed. Her
most recent PET scan was clear, and she plans to return to school this
coming September and finish law school.
Her mother Sue sent me a letter. She wrote that ObamaCare and the
dedicated doctors who took care of her daughter saved her life. There
are so many legacies of this landmark legislation. No American will end
up in an emergency room because they have no insurance. No American
will live in fear of losing his or her insurance because they don't
have a job. And in the richest Nation in the world, no insurance
company ever again will put a pricetag on a human life.
Long, long ago Thomas Jefferson wrote: ``The care of human life and
happiness . . . is the first and only object of good government.''
I am gratified that the Affordable Care Act, ObamaCare, meets Thomas
Jefferson's standard. I am so happy this law came into being. For all
of us who participated in that, we will always remember that cold
winter when we were in session longer, I am told, than any other time
in the history of the country to pass this legislation. We worked hard
to pass it. It is already insuring the care of human life, which
remains the first object of government, as Thomas Jefferson said it
should.
The ACTING PRESIDENT pro tempore. The Senator from Washington.
Mrs. MURRAY. Mr. President, I want to thank my ranking member,
Senator Sessions. We had a good debate, and I think everyone had a
chance to see the differences about the values and priorities that
drive us, how we see our country, and our future. I am looking forward
to having that conversation again today.
The budget we are debating on the floor this week puts our middle-
class families first. It reflects our progrowth, pro-middle-class
agenda that the American people went to the polls in support of at the
election just a few months ago. It takes the kind of truly balanced
approach that families across our country strongly support, and I
believe it is a strong and responsible vision for building a foundation
for growth and restoring the promise of American opportunity.
I spoke at length last night about our budget. It is built on three
principles. No. 1, we have to protect our fragile economic recovery,
create jobs, and invest in our long-term growth. This is something
every family in America is asking us to focus on.
No. 2, we need to tackle our deficit and debt fairly and responsibly.
As Democrats we understand it is a responsibility we bear today, and we
do it in this budget. No. 3, we need to keep the promises we made as a
Nation to our seniors, our families, and our communities. There are
many people who have struggled so much over the last few years and they
are counting on us to be there for them again now.
We are going to hear a lot more about all of these principles today,
and we are going to discuss the stark contrast between the budget that
is expected to move in the House of Representatives today and the plan
and path we have put forward here in the Senate as Democrats.
At this time, I yield to Senator Sessions for his opening remarks,
and we will continue this debate throughout the day.
The ACTING PRESIDENT pro tempore. The Senator from Alabama.
Mr. SESSIONS. I thank the Chair and express my appreciation to
Senator Murray for her leadership, her courtesy, and her skill in
managing the bill through the committee and on the floor. She is an
experienced legislator who has strong convictions, but she is easy to
work with, courteous, and effective in what she does every day. I thank
Senator Murray, and I enjoy working with her.
Well, our Chair says this is a pro-growth, pro-middle-class budget. I
say it is a pro-tax, pro-spend, and pro-debt budget. It is a budget of
deep disappointment. It is a budget that comes nowhere near doing the
things necessary to put America on a sound path. It is a budget that
does, indeed, reflect the stark differences between our parties. It is
rather remarkable to me, the extent to which our majority party in the
Senate has no interest in producing a budget that actually balances and
actually puts America on the right path.
They say they care about growth, and I know they do. I know they
would like to see the economy grow more and more jobs being created
because we have had the slowest recovery during this recession since
anytime after World War II, at least. It has been very, very slow. But
we have done something to a degree we have never done before; that is,
borrow and spend to stimulate the economy.
Someone has compared borrowing and spending to stimulate the economy
to the idea of someone taking a bucket and scooping up water in one end
of the swimming pool and pouring it into the other. We have no net
gain. The truth is that we lose some of the water out of the bucket as
we walk along the shore. In this case, what we lose is interest on the
debt indefinitely because there is no plan to pay down the debt.
So this budget that is before us today does not balance, it does not
put us on a sound path, it does not create confidence among the
American citizens that the future is going to be sound, that we have
gotten this country reoriented in a way that is going to produce long-
term growth. Indeed, it is going to do exactly the opposite. It is
going to do exactly the opposite. It says, once again, that this Senate
is not willing to do the things necessary to put America on a sound
course. And it is not that hard. We can do this. It is within our
grasp. But our leadership in this Senate, contrary to the House, is not
willing to take those good, solid but achievable steps necessary to put
this country on a sound path. I just feel that very deeply.
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Hopefully, in the context of our debate and a budget being moved
through here on a party-line vote, I suppose, as it was in committee,
maybe some connection will be made amongst ourselves and our Members
and our brains about the real issues facing the country and what we
need to do to get on the right path. And maybe even in conference, if
not here on the floor, we can have some miraculous agreement that would
create the kind of long-term confidence businesspeople and the American
people are looking for from the U.S. Congress and the government.
Senator Reid indicated he would like to finish. I would like to
finish too. We were under the impression that we could have started
this voting process on the budget as early as Monday, if not Tuesday.
That could have happened. Apparently, the leadership decided to block
amendments. That created, on this side, a number of Senators who felt
very strongly that they, in fact, had relevant amendments and they
wanted them voted on, and they would not agree to time limits until the
majority agreed to give them a vote. Whether I was for or against the
amendments is not relevant. I thought they should have been given a
vote. They are Senators. A big bill moving forward, several
appropriations bills cobbled together to fund the government, and we
only have four or five amendments. Serious amendments, such as the
Moran amendment with 28 cosponsors, Republicans and Democrats, was
blocked. He couldn't get an amendment on a relevant issue involving the
health and safety of America.
So that has put us behind in the schedule, not anything we have done.
There was not a problem on this side. If they had been given
amendments, they would have been done in very short order and could
have been completed Monday or early Tuesday.
So here we are. We have under the law 50 hours of debate on the
budget, 25 to a side, and an unlimited number of amendments can be
offered. So that is going to take time, as it always does, and I am
sorry it is getting pushed into the weekend.
I would also just say briefly that as time has gone by, I have been
more and more convinced of what I believed from the beginning, which is
that this Congress is not capable of producing a massive overhaul of
the Federal health care program. I remember the night Senator Reid
refers to when the final passage, I guess, occurred or the day that it
occurred. But what I remember most is being here Christmas Eve--my
birthday--when the bill cleared the Senate on a straight party-line
vote, 60 to 40. Senator Scott Brown of Massachusetts was elected on a
promise to block and kill the legislation. The American people were
consistently opposing the legislation. They were able to ram it through
before he could take office and cast the deciding vote. They got the
absolute minimum number of votes--60--to pass this monstrosity.
I am told now the regulations in the bill are 6 feet high when
stacked. We still haven't seen them. That legislation has 1,700
references to this section to be effectuated by regulations to be
issued by the department. Regulations continue to pour out in record
numbers to try to clarify the hundreds and thousands of ambiguities in
the bill.
We were told that people's health insurance premiums would go down,
that this was going to bend the cost curve to bring health care costs
down. We warned that would not happen. Who was correct 3 years ago?
Health care costs are surging. They are not through surging yet. We are
going to have more increases as the health care bill takes effect in
January of next year. The average person's premium has already gone up
$2,000-plus a year. Small businesses all over America are telling us
they are not hiring because of the health care bill. This has clearly
been a deficit and a detriment to job creation.
We had no ability to write this health care law. We didn't know
enough about it. Speaker Nancy Pelosi said: Well, we have to write it
to see what is in it. What she meant was that we are just going to pass
some vision of health care reform and the bureaucrats will take care of
it. Well, they are not taking care of it well. We are not capable of
managing it.
We are endangering the greatest health care system the world has ever
known. We are going to see fewer and fewer top-quality young people go
into medicine. I am hearing that over and over again. Doctors are
telling me they don't know what to tell their children about going into
medicine.
This is just one example of what happens in this country when people
in Washington take on the arrogant view that they know how to fix the
health care system--one of the most massive, complex, marvelous systems
the world has ever known.
You can go to Alabama and see some of the best doctors in the entire
world in our State. People go there from all over the world. Dr.
Andrews treated RG3 at the University of Alabama at Birmingham, his
private practice in Birmingham. People can go to top-quality surgeons
in Mobile, Montgomery--throughout the State--Auburn-Opelika,
Tuscaloosa, Huntsville. This is true for every State in America.
For people to say our health care is not the best in the world--why
do people come here from all over the world? That is one of the most
horrible things I have ever heard, really, around here, suggesting we
don't. So we have people who die sooner than in some other countries.
We have a lot of causes. We have more obesity. We have more smoking. We
have fewer people taking care of themselves sometimes. We have a lot of
individual problems. We have a higher murder rate. We have high
accident rates in automobiles. So we have things that pull down our
lifespan, but that doesn't mean our health care isn't good. It doesn't
mean our health care is not the best in the world. All of us have seen
that.
Mr. President, I wish to ask Chairman Murray where we are now on
going through the business of the day. I appreciate the chairman's
leadership and suggestions as to going forward.
The ACTING PRESIDENT pro tempore. The Senator from Washington.
Mrs. MURRAY. Absolutely. I am happy to get things going here today.
Does the manager on the other side have an amendment he wishes to start
with this morning?
Mr. SESSIONS. I would like to start with a motion, yes, and I am
prepared to do that, and I thank the chairman.
I offer a motion to recommit this budget that is on the floor today
to the committee with instructions that it be altered to produce a
balanced budget.
That is what I think this Nation needs. I think that is what the
American people want, and that is what we are determined to fight for
because it is the right thing for the country, not because it is some
green eyeshade goal. I have heard that argument, and that is not what
is on our minds when we say: Let's balance the budget. It is not what
the American people have on their minds when they say: Why don't you
guys balance our budget?
What is it that is necessary here? We believe that if we alter our
debt course in a responsible way and we begin to reduce the deficits
regularly and steadily in an effective way, we can reach a balanced
budget and we can keep on that balanced budget without cutting
expenditures. The facts are quite clear that we can increase spending
every year, just not as much as we are increasing spending today and
just not as much as our Democratic budget increases spending. That is
what we believe we should do. I will explain as we go forward how that
can create jobs, create growth, will make this country healthier, will
create confidence in the world financial community, will see more money
come to the United States, and will allow businesses that are sitting
on cash to begin to invest and hire people. That is the direction in
which we should be going. That is what would be good for America.
But first and foremost, as I explained last night, the Democratic
budget on the floor today comes nowhere close to that. It is nowhere
close to setting forth a plan that would actually balance the budget.
Indeed, the budget never balances under their plan, and it won't
balance in the future. Things are only going to get worse. They are
going to get worse because it deals in no way with the fundamental,
driving forces of the debt this country faces. It does not deal with
that. If we don't deal with those issues, then we are not going to get
the debt under control. But we can do it. We can do it in a number of
ways.
Now, the President has sent a very clear message. Recently on ABC,
with George Stephanopoulos, the President said: And so, you know, my
goal is not to chase a balanced budget just for the sake of balance.
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Who said we are trying to chase a balanced budget just for the sake
of balance? That is not what we are doing. We are trying to put America
on a sound debt path. We are trying to put America on a sound financial
path that will create confidence and avoid the danger of a fiscal
crisis.
We started counting last night. My colleagues, yesterday and last
night--I think we stopped counting--used the phrase ``balance'' 24
times: This is a balanced approach. It is a balanced plan. We are
seeking primary balance. We are going to have a responsible, balanced
plan.
Pretty soon, they will say they have a balanced budget. Well, they
don't have a balanced budget. We need to understand that fully.
Secondly, the budget that has been produced does not even put us any
closer to a balanced budget than we are today. When we add up the taxes
that are being increased, when we add the new spending that is in this
bill, it doesn't change the debt course at all.
Earlier this year, Mr. Elmendorf, the Director of the Congressional
Budget Office, testified before our Budget Committee. Mr. Elmendorf is
an excellent scholar and a man who has managed the money of the budget
well. Mr. Elmendorf is--Mr. President, I am having a little trouble
concentrating with the roar going on in my background. I would
appreciate it if we could keep it down a little bit.
The ACTING PRESIDENT pro tempore. Regular order.
Mr. SESSIONS. So Mr. Elmendorf told us at the Budget Committee that
we are on an unsustainable path. OK. This is after the Budget Control
Act, after we reduced the growth of spending $2.1 trillion, and that
includes the sequester. After we did all that, this year he told us we
are on an unsustainable debt course. He said this is a danger to
America and we have to get off it and we need to make further changes
to get on the right course.
So we have looked at this budget, and we thought the committee, which
called him, would listen to him, and we wanted to see if the budget
that is on the floor now actually helps us get toward a sound financial
future. I have to say it does not. It does not change the course we are
on. It raises taxes dramatically, but it raises spending and eats up
all the new taxes, not altering the amount of debt that will be raised
over 10 years.
Isn't that a failed budget plan? Isn't that a failure of leadership?
I hate to say that. But the challenge of our time is to deal with our
financial crisis. The challenge of our time is to alter the debt course
we are on and put us on a sound path, and it has not been met by this
budget.
The House budget--we all may have different ideas about some of the
things in it--provides for increased spending every single year, but it
balances the budget, totally balances the budget, in 10 years. It would
balance in 10 years and does it by increasing spending every year, on
an average of 3.4 percent a year. So we can increase spending at 3.4
percent a year--increase spending--and balance the budget.
But the problem is the budget the majority sends forth would increase
spending at 5.4 percent a year. That does not sound like a lot, but the
difference is trillions of dollars. The difference is a plan that puts
us on a sound financial path to the future and a plan that leads us on
the unsustainable debt course we are now on.
My Democratic colleagues need to look at this. We saw, I guess, in
Politico--I had the quote here yesterday that said fundamentally the
majority's plan was written by the left of the Democratic conference--
the left--and it said explicitly to the left of President Obama. That
makes sense if we look at what is in the budget. Look how much they
spend, how much they tax, and how they do not reduce the debt we are
adding every single year. So that is what we have.
As Chairman Murray said, budgets present a contrast. Budgets lay out
your vision for the future. A budget defines who you are because it
says how much you want to tax in the next 10 years, it says how much
you want to spend in the next 10 years, and it requires you to state
how much debt you are going to accumulate for America over the next 10
years.
This plan will add another $7.3 trillion to the debt of America. We
are already at almost $17 trillion. That will take us to about $24
trillion in 10 years. Interest on that debt is huge. By their own
numbers, interest on their debt would amount to approximately $800
billion in 1 year. Interest on the debt, under their budget, would rise
to the point of $800 billion in 1 year. We spend about $100 billion on
education. We spend about $40 billion-plus--a little over--on highways,
roads, and bridges. That is just an example. We are now surging from
$200 billion, $250 billion in interest to $800 billion in interest. As
a result of the accounting CBO has provided us, if we follow this path,
it is going to crowd out spending for research, it is going to crowd
out spending for children, education, health care, and any other
program this government wishes to undertake, including defense.
Mr. President, what kind of time limit is there, might I inquire? Is
there 30 minutes on this side on this motion?
The ACTING PRESIDENT pro tempore. On the motion, there is 1 hour,
equally divided.
Would the Senator like to call up his motion?
Mr. SESSIONS. The first question would be how much time is left on my
half of that hour.
The ACTING PRESIDENT pro tempore. The motion has not yet been
offered.
Mr. SESSIONS. Mr. President, I call up the motion.
The ACTING PRESIDENT pro tempore. The clerk will report the motion.
The assistant legislative clerk read as follows:
The Senator from Alabama [Mr. Sessions] moves to recommit
Senate Concurrent Resolution 8 back to the Committee on the
Budget with instructions to report back no later than March
22, 2013 with such changes as may be necessary to achieve
unified budget balance by fiscal year 2023.
The ACTING PRESIDENT pro tempore. The Senator from Alabama.
Mr. SESSIONS. This motion would simply say this to our colleagues--it
will be a defining vote for our Members; and Members need to understand
the meaning of this vote--the question will be: Do you favor a balanced
budget? Is it important to you? Have you said: I am going to vote for a
balanced budget amendment. Have you said in your townhall meetings and
in your campaigns and in your debates: I believe in a balanced budget
amendment or I believe in a balanced budget, period.
What we are saying is that this country can balance its budget. We
can balance the budget in America today if we set forth a plan that
allows the spending levels to increase by 3.4 percent a year for the
next 10 years. Isn't that great news? We can spend 3.4 percent more
each year. According to the data the Congressional Budget Office gives
us and we rely on, we can do that and still increase spending over the
next decade.
Inflation is going to increase about 2 percent or a little over,
according to CBO. Inflation will increase about 25 percent over the
next 10 years and about 40 percent if we increase spending each year at
3.4 percent. That puts us on a path to balance. It begins to reduce the
debt overhang for our country. It brings down the amount of debt we
have in our country and puts us on a sound path. It does all the things
we need. It sends a message to the world that we have our financial
house in order. I believe good Members of this body--Democrats and
Republicans alike--have told their constituents and are sincerely of
the belief that we can and should balance our budget. When I say
``balance,'' I mean honest balance, not some balanced approach, not
some primary balance, none of that; that when the revenue comes in and
the money goes out, it is the same. We are not sending more money out
than we are bringing in, in revenue, having to borrow the difference
and pay interest on it. Because that is what we have been doing to a
degree we have never, ever done before in this country. We have never,
ever done before what we are doing now. We have never, ever had 4
consecutive years of trillion-dollar deficits--nothing close to it.
People say President Bush was irresponsible. He should have been more
wary of the grand promises that the economy would never have a
recession and that things are going to go great. He should have. The
next to the last
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year he was in office, the budget deficit was $167 billion. It had
dropped from a higher figure in his time in office. His last year, it
was $450 billion or $460 billion.
President Obama has been in office 4 full years, starting his fifth,
and his deficits have been averaging $1,200 billion a year. We have
never, ever, ever seen anything like this before. The debt of the
United States of America has surged, and our Democratic colleagues do
not have a plan that will put us on a sustainable path in the future.
If we come back out of the economy and we restrain the spending
growth just a little bit, we can balance the budget. That is what we
ought to do. Again, the goal of balancing the budget is not some
frivolous goal for political reasons. The goal of a balanced budget is
that we would put us on a sound financial course. It will mean we have
confronted the challenges of our time. It means we know we cannot
continue to spend systemically more than we bring in, that a debt
crisis could occur and we could have a decline in wealth in America.
So when we say we want to recommit to the committee, colleagues, you
need to know what this means. It simply means this: We are directing
the committee, the majority of whom are Democrats--and they can write
the budget as they choose, using whatever tax changes they want to make
and whatever spending changes they want to make--but the budget that
hits this floor would be a budget that balances, that creates growth,
confidence, and prosperity for America. That is what we are asking you
to cast a vote for, and I believe you should break ranks on this. I
believe you should vote your conscience. I believe every Senator should
vote the beliefs of their constituents. Poll after poll after poll
shows that the American people prefer a balanced budget. They know we
cannot continue to do what we are doing.
I think it has potential. We are willing to work with the majority.
We may disagree with the results, but, my goodness, wouldn't it be
great if the Senate produced a budget that balances--and it has one
vision of how to balance the budget, the House produced a budget that
balances and they have their vision about how to balance the budget--
and we go to conference and we could actually reach some sort of a
compromise that would fix the financial future of America? The whole
world would be amazed. They would say: My goodness, the United States--
look at this--they have gotten themselves together. We thought they
were going goofy. We thought they had completely sold out to spending
and borrowing and look at this.
There would be more investment. American businesses would feel
better. American workers would feel better. We would begin to have more
growth that way.
That is the way we believe jobs and growth are best created, not by
the sugar high that comes from borrowing and spending money.
Back when we did the stimulus bill--I would like to share this with
my colleagues because a very important concept was explained us to by
Mr. Elmendorf, the CBO Director. Back when we did the stimulus bill,
the $800 billion-and-something that President Obama passed that was
going to reduce the unemployment rate dramatically, put the country on
a sound path, and stimulate the economy, we asked how were we going to
do it? We were going to borrow money--every penny of the $830 billion--
now $1 trillion with interest--was borrowed and we spent it.
This is what the Director of the Congressional Budget Office said
about that. He said: Yes, it will create growth in the short term. It
will enhance the growth in the short term. One financial expert called
it a sugar high. We will get that. But once that is over and we have
the burden of the debt, it begins to cost us every year and it will
cost us as long as that money has been spent, as long as we pay
interest on that money, and we are going to pay interest--young people,
American people--indefinitely because we have no plan to pay down this
debt that we have accumulated. We will be paying interest on that
indefinitely.
This is what CBO said back in 2009 when the stimulus bill was passed.
They said: Yes, you get a short-term benefit. But CBO said that over 10
years, you will have less net growth than if you did not have the
stimulus package at all. Think about that.
So we took the sugar high. We voted to borrow the money. I did not. I
opposed it. But it passed to borrow more money, to spend now to try to
create a sugar high, pull yourself up by your bootstraps, pour one
bucket of water from the pool into another, and this is going to
somehow permanently fix our economy.
There were some things that I think would have been legitimate for us
to do at that time. I supported a more restrained package that had more
infrastructure and actual benefits in it. But, fundamentally, we are
almost now at the point where the benefits of that spending have been
gone and the detriment is already here. Multiply that. Multiply that by
the fact that we now have a total of $17 trillion borrowed from around
the world, and we are paying interest on that every day. But we are
paying extraordinarily low interest rates, unlike any we have seen in
the history of the world, and those low interest rates are not expected
to remain.
This is why they project that with this budget we will have a $24
trillion debt by 2022, resulting in $800 billion a year in interest.
This would be more than the Defense Department, more than we pay on
Social Security today, and more than we pay on Medicare today. This is
a huge item.
I would say we want growth. We want prosperity. We want to unleash
the natural, inherent, entrepreneurial power of the American spirit,
economy, and culture. It is a wonderful thing we have. Our free market
infrastructure is magnificent, but it is being handicapped by poor
economic financial policies of this country. We need to exit this path
and return to a path for a balanced budget amendment.
I thank you for the opportunity to make this motion and hope it will
be considered. It would provide the committee with full freedom to
produce a balanced budget through any way you choose, through any mix
of tax-and-spend policies which would be chosen by the committee. It
would then come back to the floor. If we were to vote for it, then it
would go to conference and put us in an extraordinarily better position
to achieve a bipartisan agreement this year, which could help pull us
out of the economic doldrums. This would put us on a path to economic
prosperity to eliminate the debt drag which international studies, the
IMF, European Central Bank, Bank of International Settlements, and
Professor Rogoff and Professor Reinhart have all shown pulls down
growth. They are saying our debt is so high it is lowering economic
growth right now.
We would change all of this through a balanced budget coming out of
committee. It would put us on the right path without having to reduce
spending, actually. We could still increase spending every single year.
I submit my motion, and I yield to the Chair.
The ACTING PRESIDENT pro tempore. The Senator from Washington.
Mrs. MURRAY. Mr. President, I rise to use time in opposition to the
resolution.
The ACTING PRESIDENT pro tempore. The Senator is recognized.
Mrs. MURRAY. Our colleagues have sent a motion to the desk which
sends our budget back to committee to balance.
I think we all know what this means. They wish to send our budget
back to take months and weeks to put together a budget, which does one
of two things in order to balance: It either raises incredible revenue
or has devastating cuts. We have seen the package they are talking
about. It is the Ryan budget being debated in the House right now. They
say they would eliminate the deficit in 2023.
The Republicans have not put this budget out here right now, because
they don't want to specify what the cuts are and be responsible for
them. They just want some mystical moment to happen back in committee
where these tough decisions are made.
We know what they are looking at. They are looking at the Ryan
budget. They say it eliminates the deficit, but it does so in a
devastating way to middle-class families across this country, families
who are already struggling so much.
[[Page S2058]]
We hear a lot about balance these days. I want to clarify some real
differences, important differences between how the Senate and the House
budget use the word ``balance.''
The proposal which passed through the Budget Committee in the House
would be devastating for our economic recovery. It would really
threaten hundreds of thousands of jobs this year alone. It makes
extreme cuts to our infrastructure, which is crumbling; to education,
which is so important to our future; to the innovation this country has
been built on, which would lay down a strong foundation for broad
economic growth--which our Senate budget is working so hard to make
happen.
Their budget in the House which the Republicans now want us to go
back to committee and put in place would dismantle Medicare and cut off
programs to support our middle-class and most vulnerable families. This
sounds pretty unbalanced to me.
Frankly, their budget gets worse. As we learned last week, House
Republicans have put forth a budget which calls for huge tax cuts for
the wealthiest Americans and makes it unclear how it will be paid for.
Those pay-fors will come on the backs of families who are working
hard, average families who would see their taxes increase in order to
give that tax cut to the wealthiest Americans. This is what they call
balance.
I don't think that is balance. House Republicans like to say they are
offering a balanced budget, which I would note also includes savings
from the Affordable Care Act they vowed to repeal and tax increases on
the wealthiest, which they strongly oppose. They haven't explained how
they will reach that goal of reducing those rates down to 25 percent
and who will pay for this. It is pretty clear, when you look at the
numbers, how that will happen.
The House Republicans never explain how they get to what they call
``balance,'' because the only way they can do it is by raising taxes on
the middle class or making deep cuts to vulnerable families and
seniors, who depend on these benefits.
Our budget takes a very different approach to balance. We ensure our
families today have the ability to get what they need to put their
families back on a stable path to recovery. We make sure we invest in
the important things this country needs to ensure our middle class has
what they need in education and infrastructure. These are the things
which allow families to know their kids can go to college, pay their
mortgage, receive job training, and get back to work. That is balance.
When we have a responsible approach to spending cuts and to revenue,
balance is an important word. Balance is about making sure we do what
the Simpson-Bowles report has recommended, what every bipartisan group
has said, and contains a responsible mix of revenues and spending cuts.
This ensures no one bears the burden of the challenges of this country
alone.
I would not call the House Republican bill balanced. Their balance
says the wealthiest Americans, the biggest corporations don't
contribute to this problem at all. Everything is done on the backs of
our middle-class families.
Balance is an important word. It is an important word to every
family, every community, every American. The approach we take is
balanced, making sure everyone has an opportunity in this country for
the future we need. This ensures everybody participates in solving the
problems in front of us.
I take a backseat to no one when it comes to making sure we have a
balanced approach. Our budget does that. We are going to be hearing
more on it right now. We have a number of colleagues on the floor.
Let me make this very clear. The motion to recommit the Senators on
the other side have offered simply says we will return to committee
until we get the Ryan bill in front of us. This is something we soundly
reject.
I have a number of colleagues here who will participate. I yield to
the Senator from Delaware and thank him for his great contributions to
our committee this year.
Mr. President, I yield time from the resolution.
The ACTING PRESIDENT pro tempore. The Senator from Delaware.
Mr. COONS. Mr. President, I ask unanimous consent to enter into a
colloquy for up to 30 minutes with Senators from California, New York,
Illinois, and Maryland.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. COONS. Mr. President, at its heart a budget is a statement of
values. Last week I joined with my colleagues on the Budget Committee
to pass a budget resolution firmly rooted in our values.
With appreciation to the chairmanship of Chairman Patty Murray, the
budget we passed reduces our deficit and stabilizes our debt in a
balanced, responsible way, relying on an equal mix of spending cuts and
cuts to spending through the Tax Code, which is a balance of cuts and
increased revenue through tax reform.
This first chart briefly shows we have made significant progress
toward the Simpson-Bowles goal of $4 trillion in reduced Federal
spending over the next 10 years. Our budget relies on these two next
pieces, reducing loopholes, tax expenditures, and spending cuts. This
is the balance I believe the American people called for in the last
election.
Our budget promotes economic growth and job creation in the short
term, makes critical investments in our competitiveness for the long
term. It does all of this while putting a circle of protection around
the most vulnerable in our society: children, low-income seniors, and
the disabled.
Unfortunately, in my view the budget resolution passed by the House
Budget Committee, led by Chairman Ryan, does not reflect these same
values or this same balance. It is wildly unbalanced, relying only on
spending cuts in order to achieve claims of enormous savings.
Yet when you look closer--and we will turn to this in more detail
later in this colloquy--the Ryan budget actually relies on a whole
series of deceptive gimmicks, impossible arithmetic, and unrealistic
assumptions. The only way to make the Ryan budget add up is to increase
our deficit or to raise taxes on the middle class by as much as $3,000
a year.
In my view, the House Republican budget either fails the test of
deficit reduction or fails the test of basic fairness. It also, I
believe, fails the test of economic growth and would put us on a fast
track to austerity.
Let me turn now, if I might, to my friend and colleague from the
State of Maryland to ask for his further comments on the contrast
between the budget we have adopted here in the Senate and the budget
offered over in the House.
Senator Cardin.
Mr. CARDIN. Let me thank my friend from Delaware, Senator Coons. The
Senator is exactly right, as he talks about balance. Senator Murray is
absolutely right about the balance we have and the budget which has
come out of the Budget Committee.
Yesterday we did something which was the right thing to do. We passed
the continuing resolution, an omnibus appropriations bill. The good
news is we worked together. We completed it, and it was a major
improvement from what the House did. The House again was acting in a
very partisan, one-way direction which would have caused additional
harm.
I was disappointed the bill we passed yesterday was at the
sequestration levels. I am against sequestration. I think we should
substitute it for strategic reductions in the deficit. This is exactly
what the budget coming out of the Budget Committee would do. It will
substitute for sequestration a strategic way to get our budget into
better balance. This is what we need to do.
The budget, as Senator Coons has pointed out, is our blueprint. It
speaks to the priorities we have as a Nation. It is a framework. All of
the elements which are necessary for a responsible budget are included
in the budget document, which has been brought to the floor. I am proud
to support it. It gives us the right blueprint for America's future.
The most important thing is it does get rid of sequestration.
Sequestration is across-the-board mindless cuts. It says every priority
in this country is exactly the same. That is not the case. The budget
coming out of the Budget Committee is a responsible way of substituting
for sequestration.
Senator Murray mentioned balance. I wish to speak about this chart,
which
[[Page S2059]]
points out the fact of how balanced the budget is. The Senate
Democratic budget balances additional spending cuts--Senator Coons is
absolutely right--and additional cuts in what we do in the tax
expenditures. We spend money through the Tax Code and through
appropriated bills. The budget you brought out balances reductions in
both categories. Sequestration only applies through the appropriations
process. It doesn't apply to how we spend money through tax
expenditures.
It is very interesting, as this is very similar to the other
bipartisan proposal which has been brought forward. We talk frequently
about Simpson-Bowles. Some of us may have disagreed with the specifics,
but we thought it was the right blueprint and the right balance between
spending reductions and tax expenditure reductions.
The Senate Democrats' proposal is very similar to Simpson-Bowles on
the ratio of cuts. Actually it has more spending cuts and a little bit
less revenue. Again, the Gang of Six is very similar. We are very proud
our colleagues came together in an effort to try to bring Democrats and
Republicans together. The Democratic budget in the Senate builds upon
that bipartisan cooperation. It is very similar.
When we look at the House Republicans, they are totally out of step
with what is necessary in order to get our country back into balance.
This provides a framework for investment. I appreciate the fact
Senator Murray has provided ways in which we can invest in
infrastructure, invest in research and development, and how we may
invest in education. This translates into job growth. The more jobs we
create, the more people pay taxes and the less revenue which is used.
This is how you also balance the budget.
The Senate Democratic budget, the budget coming out of the Budget
Committee, provides for those types of important investments. You also
protect the most vulnerable citizens. This is so important. You protect
Medicare. Why? Because it is important for the dignity of our seniors.
I particularly appreciated the statements which were made by Senator
Durbin, who was a major player in bringing this out, that going into
deficit reduction we want to protect the most vulnerable. We don't want
to add to the poverty of America. The Democratic budget which you
brought out carries out that commitment, protecting our most
vulnerable.
You also lived up to the commitment to our veterans, and I appreciate
that very much. President Kennedy said, ``As we express our gratitude,
we must never forget that the highest appreciation is not to utter
words, but to live by them.''
We all say how much we appreciate our veterans and our soldiers and
what they have done for our country, protecting the democracy and
freedom of our country. This budget does more than just say our
appreciation, it acts by deeds, carrying out our commitment to the best
health care for our veterans, including mental health services. I
particularly appreciate the reserve fund that is permitted that makes
more veterans eligible for benefits and improves the efficiency of the
claims processing, which is particularly important in our region where
so many veterans have waited way too long to get the benefits to which
they are entitled.
Let me mention one last point, which is a huge difference--and
Senator Murray and Senator Coons have mentioned it. The main difference
between the budget the Democrats have brought out and the Republican
budget conceived in the House is this is a credible way to manage our
deficit, which is the most important thing--managing our deficit in a
credible way--that will get our deficit under control. It builds on the
deficit reductions we have already done. Since we started this debate
and the Simpson-Bowles recommendations came out, we have already done
$2.4 trillion in deficit reduction, $1.8 in spending reductions, and
$600 billion in revenues. This is very similar to how the Simpson-
Bowles proposal was made to have a plausible baseline.
Now, I am not going to get too technical about all this, but it means
we are not using smoke and mirrors but are using a realistic baseline
in order to do the deficit reduction. It is achievable, it is doable,
it is credible, and Senator Coons deals with tax extenders.
One more word about tax extenders, because Senator Coons is
absolutely right. We have provisions in the spending programs of this
country that invest in energy security that are subject to
sequestration because it is an appropriations bill. But we have
provisions in the Tax Code that give special breaks to the oil and gas
industry. These are expenditures. These are revenues we are
hemorrhaging. They should at least be under the same scrutiny as the
appropriations bills. What this budget is saying is that we can get
some savings from these tax expenditures and then use that to get our
debt under control.
Senator Murray is absolutely right. One of the huge differences
between the Democrats and the Republicans is the Republicans want to
reduce the tax breaks for middle-income families to give bigger tax
breaks for high-income families. We say we can make the Tax Code more
efficient and have a budget that allows for the growth of the middle
class and manage our debt in a better way.
The bottom line is this budget produces $4.25 trillion over the 10-
year window compared to Simpson-Bowles, which was $4 trillion. It is
even more deficit reduction than the Simpson-Bowles proposal. It puts
us on a sustainable path for a manageable deficit.
What we need to do now is negotiate and get this done for this
Nation, and this framework gives us the ability to do that. What
Americans want is a balanced approach that allows for growth and that
is credible. This budget gives us that pathway and, most importantly,
it will give predictability to the American economy, which is what I
hear more and more as I go around. People want us to make decisions. We
are prepared to make decisions. This budget gives us that pathway, and
I congratulate Senator Murray. I also congratulate Senator Coons for
the work he has done.
Mr. COONS. I thank the Senator for his comments and for his
leadership in the Budget Committee and his hard work in the Chamber
over many years.
The budget we are bringing forward to this floor today is one that
invests in growing the American economy; that gives us a real path
forward toward out-educating, out-innovating, and out-building our
competitors globally; and one that is focused on job creation but also
on deficit reduction in a responsible and balanced way. In my view, the
Ryan Republican budget, if adopted, would give us a cure worse than the
disease.
To talk about the budget's impact on America's treasured entitlement
programs and the promises we have made to our veterans and our seniors,
I am grateful to turn to my friend and colleague, Senator Boxer of
California, who has joined us.
Mrs. BOXER. I thank Senator Coons so much for including me in this
opportunity to speak about the choices we have before us.
Mr. President, may I ask how much time remains for Senator Coons so I
have some idea?
The PRESIDING OFFICER (Mr. King). There is 18 minutes remaining.
Mrs. BOXER. We all know a budget is critical because it is not just a
bunch of numbers, it is a statement as to who we are as a people--what
are our values, what we think is worth investing in, what we think we
should cut, and so on. It is interesting because we have been
attacked--Senator Murray and the Democrats--for backing a budget the
Republicans say is not in balance. Well, I want to argue the point. I
think it is, in fact, the only budget, between this budget and the
Republican budget in the House--which is the one embraced by the
Republicans--that is balanced in many ways.
The first way this budget is balanced is between investments--the
things we need to invest in for our Nation; in innovation, education,
investing in our kids, investing in their health--and commitments we
have made over the years to our senior citizens. I am going to talk
more about that in a minute, about what the Republicans do to Medicare
in their budget--by the way, they kill it. I will explain how and why.
Our budget also moves us toward numerical balance in a way that
economists of all sizes and stripes believe is wise, which is to get
the deficit down below 3 percent of GDP.
[[Page S2060]]
My colleagues don't think that is good enough, although I never heard
one word from them--not one word--when George W. Bush came in and
shredded the budget. He took a surplus that Bill Clinton and the
Democrats, with the help of some Republicans, had put in place, and
they shredded it under George Bush by giving tax breaks to the
wealthiest, putting two wars on the credit card, adopting a
prescription drug plan that didn't allow Medicare to negotiate for
lower prices, and the deficit went wild. And it didn't even make sense.
I am an old--well, I am old--economics major, and I remember the
basics. You don't go into such deep debt because, if there is a
recession, you can't really help but spend your way out of it.
So what happened when President Obama got elected is he faced the
worst deficit crisis, and that deficit went up to well over $1
trillion. He has gotten it back to $850 billion. It is still too high,
but the fact is I never heard a word from my really good friends on the
other side of the aisle when they were racking up those debts. It was,
oh, this supply side stuff is going to be great. Well, it wasn't great.
It wasn't good. And I am glad this budget takes us back to the notion
of the Clinton years, which is we have a balanced approach between
revenues, investments, and commitments to our people.
If we look at the Republican budget--that Ryan budget over there that
passed with huge Republican support--we can see what he does. I have to
tell the people something they may not know. The Ryan budget, the
Republican budget, includes more tax breaks for the people at the top.
Surprise. I thought we had an election about this. That didn't seem to
matter to the Republicans. A new tax break of $200,000 a year for
people making over $1 million. Just what we needed, Mr. President. More
tax breaks for the people at the top. This is per year. Think about
that. The average income is about $50,000 a year, and the Republicans
are giving $200,000 a year to millionaires. Forget it. That is why they
want us to send this budget back--to come out with that kind of a
budget? No way. I want a balanced budget.
By the way, how do they pay for this? With unspecified closing of tax
loopholes. Well, let me tell you, the amount of money they are putting
in these new tax breaks--$5.7 trillion--is so high they will have to
end the home mortgage deduction, which the middle class really needs.
The wealthy people don't need mortgages, they can buy their homes
outright. The middle class, the upper middle class need this tax break.
Charitable deductions, which our charities count on, is another of
their loopholes; and making sure you can write off State and local
taxes, which helps our States and our cities. That is what they are
going after. They do not say it because it is ``unspecified.''
I hope I have made the point that the Republican budget is basically
a sham because I don't know any Senator on either side of the aisle who
would vote today to do away with the charitable deduction, the home
mortgage deduction, or State and local tax deduction. Maybe a couple of
them would, but I can tell you, hearing from my folks at home and the
charities that depend on that deduction and the real estate people who
are finally seeing a little recovery, what a time to do that. So I say
that budget is a sham. It doesn't balance and, worse yet, it hurts our
people.
I have only one more point to make and then I will yield back the
time to my friend.
How much time remains?
The PRESIDING OFFICER. Thirteen minutes is remaining.
Mrs. BOXER. If the Chair will advise me when I have used 5 minutes.
So let me now tell you about Medicare. In the Republican budget, if
you are younger than 55, instead of getting the same Medicare your
parents had and the same Medicare you have paid into and the same
Medicare that you counted on, it is over, folks. It is over. You will
get a voucher. There is no more Medicare. They tell you to go out with
that voucher and find your own insurance.
Now, we know, because studies have shown us, that plan says you will
be paying $6,000 a year more out of your own pocket for health care.
That is what this so-called Medicare--new Medicare--Program is. It is
not Medicare. Medicare is a guaranteed benefit where you take the card
and go to the doctor. Here you take a voucher.
So now you are 55, and then you get older. If you are lucky enough to
get health insurance, and you get older and now you are 70 or 80, and
you are taking an insufficient voucher--you are retired--this is a
giant nightmare. These are supposed to be the golden years. Well, the
people who lose this will have lost the golden Medicare guarantee, I
will tell you that.
Here is the final point. The Republicans say if you have Medicare,
don't worry. You are fine. Baloney. If you end Medicare, destroy it
like the Republicans do, the people left in it are part of a dying
program that is being phased out. Who is going to try to improve the
quality of that program? It is going to be like fixing an Edsel or
fixing your typewriter. There is no more Medicare. It is going to be a
program that is dying, that is being phased out, and that will hurt
current senior citizens.
So let's be clear. The Ryan budget, the Republican budget, takes the
Medicare promise and shreds it, destroys it, and it is the end.
When President Johnson signed the Medicare law in 1965, here is what
he said:
No longer will older Americans be denied the healing
miracle of modern medicine. No longer will illness crush and
destroy the savings they have carefully put away over a
lifetime. No longer will young families see their own incomes
eaten away because they are carrying out their deep moral
obligation to their parents, to their uncles and their aunts.
So I am saying to Senator Murray: Thank you, thank you, thank you,
for your leadership. I am saying to Democrats such as Senator Coons,
who has organized this today, thank you for your leadership, thank you
for a budget that recognizes our obligations to our seniors, to our
veterans, to our children, to this Nation, to make sure this is a
Nation of innovation, and thank you for protecting transportation, an
issue that I care deeply about as chairman of the Environment and
Public Works Committee. Without being able to move people and move
goods, our Nation will not be a leading economic power.
So I thank you, and I yield back to Senator Coons.
Mr. COONS. I thank my good friend from California and the other
members of the Budget Committee who have worked so hard to pull
together this proposal, this package, this budget resolution that comes
to the Senate floor today.
I think this is a great week for the Congress. We are at last, in
stark contrast, presenting to the people of the United States a budget
path forward adopted by the Republican-led House and a budget path
forward adopted by the Democrat-led Budget Committee. Hopefully, this
will not just be debated but adopted in this Chamber this week.
Let me briefly summarize the main points made by my colleagues.
First, as the Senator from California emphasized, one of the core
elements of the Ryan budget plan that gives us real pause and concern
is that it doesn't keep our promises to our seniors, to our veterans,
and to our most vulnerable populations.
It block grants Medicaid, it repeals the health care law's expansion
of Medicaid, it repeals the health care's law exchange subsidies, and,
more important than anything else, it turns Medicare into a voucher
program. These are fundamental changes.
When Chairman Murray began our deliberations as a budget committee,
she laid out three core values she wanted us to keep in mind; that our
budget resolution should, first, help grow the economy and help the
private sector create jobs, and I believe it does that by prioritizing
critical investments in infrastructure, in education, and in R&D;
second, to keep our promises to our seniors, to our veterans, to those
in our country to whom we have made commitments over decades--something
I would add, that we also continue to respect and embrace a circle of
protection for the most vulnerable in our society; and last, that we
make credible progress toward reducing our deficit and debt but in a
sustainable way that allows us to continue to grow our economy from the
middle out.
Let me turn for a few minutes to some criticisms or challenges that
[[Page S2061]]
many of us on the Democratic side of the Senate have of the Ryan
Republican budget. Briefly, it relies on outlandishly rosy assumptions
about revenue and spending levels. It counts $716 billion in Medicare
savings from the very health care reform law it says is repealed, and
that tension within the Ryan budget is irresolvable.
Third, $810 billion in Medicaid savings are just cost-shifted onto
the State governments. As we know, States all across this country are
struggling to balance their budgets today. These costs are not trimmed.
They are simply shifted from the Federal Government onto the States.
Fourth, Ryan relies on $800 billion in undefined savings in mandatory
programs, significant cuts that would have dramatic and negative
impacts on our country and on our economy. There is $800 billion in
cuts that he doesn't specify out of his total $962 billion in overall
savings to so-called other mandatory spending.
Last, Ryan claims his tax cuts for the wealthy--which cost more than
$4.5 trillion--wouldn't add to the deficit. To give some visual sense
of the likely impact, it is anything but balanced. While Ryan claims
his budget plan would balance the budget--and I challenge that
assumption, given all these different mathematical and programmatic
challenges--it is also doing it in a way that is fundamentally
unbalanced and that doesn't respect our core values. To double down on
tax breaks for the wealthiest Americans, to give an additional tax
break of more than one-quarter million dollars a year to the very
wealthiest Americans while shifting that tax burden onto the middle
class doesn't make sense. It doesn't meet the test of fairness and it
doesn't meet the test of sustaining economic growth in a balanced way.
Last year, the independent Tax Policy Center analyzed the Ryan rate
reduction, the proposal to reduce rates on the wealthiest Americans to
25 percent, and estimated that unless those costs were offset with
corresponding tax hikes, it would add $4.5 trillion to our deficit.
So which one is it? Does the plan shift tax burden to middle-class
Americans as was described in some detail by my colleagues or does it
actually add to the deficit and fail the test of balance?
Let me move then to the question of revenue and how our budget
package achieves some contribution to balance going forward. One of the
things that I think is important for folks watching the difference
between these two plans to grasp is that both plans make significant
changes to what my colleague from Maryland talked about as spending
through the Tax Code.
We spend almost as much as we receive in revenue through a Tax Code
that, in the many years since 1986, has become riddled with loopholes,
exemptions, and special treatments, particularly for the wealthiest and
best connected. Both plans--the Ryan plan in the House and the
Democratic plan in the Senate--both close tax loopholes. Out of an
estimated $14 trillion in these tax expenditures over the next decade,
the Ryan plan actually cuts $5.7 trillion. The Democratic plan that we
are moving forward today only cuts 7 percent of these tax expenditures.
That is how I think we can credibly say it would not cut into those tax
expenditures relied on by the middle class--things such as the home
mortgage deduction, the deduction for employer-provided health care,
the deduction for charitable contributions. This 7-percent reduction in
tax expenditures is much more modest than the significant amount of
revenue raised in the Republican plan.
The more important contrast, though, is to what end. What do we do
with these two significant differences in revenue raised through
closing tax loopholes? As I said a few minutes ago, the Ryan plan would
dedicate it almost exclusively to reducing tax rates for corporations
and the wealthiest Americans while, in our balanced plan, this is half
of the total contributions we make toward deficit reduction.
Let me move toward a close with a few conclusory comments. There are
reasons to say the House Republican plan makes cuts that will grind our
economy to a halt, makes cuts that are unduly focused on just those
areas that we think deserve investment: research and development,
infrastructure, education, public health. In my view, it wipes out the
chance for us to continue to expand high-tech manufacturing to ensure
that we have a more competitive economy, to cure life-threatening
diseases, and to bring America's economy fully back to health. It
relies on budget gimmicks and on faulty assumptions. In my view, the
plan we move forward today is a more balanced and responsible path
forward to keeping our promises to seniors and veterans, to protecting
the most vulnerable in our society, to dealing with our deficit and
debt, and to moving this country forward.
The future that our budget plan would move us toward is the kind I
envision for my kids, for my State, and for our country--one where we
can grow our economy but continue to respect our most basic values.
Even though the Ryan plan, in my view, fails a basic test of values,
it also fails a basic test of balance. We have a budget that this body
will take up and consider today and I hope we will pass. As it passed
out of committee with the strong leadership of Chairman Murray, I am
confident it will pass out of this Chamber today. From that passage, it
is my hope that people of the United States can see us begin to work
together on a balanced bipartisan plan that will responsibly deal with
our deficit and debt, grow our economy but continue to respect our most
fundamental values.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SESSIONS. Mr. President, was the time used there time against the
motion?
The PRESIDING OFFICER. No. The Senator from Washington specified that
the time would be taken off the resolution.
Mr. SESSIONS. Mr. President, we understand what is happening here.
The budget produced by the majority does not balance, doesn't come
close to balancing, does not change in any measurable way the debt
course we are on that the Congressional Budget Office Director said is
unsustainable.
This budget taxes more, it spends more, and does not change the debt
course we are on; therefore, it is a budget about to bankrupt America
because, as Mr. Elmendorf said, our current deficit plan endangers our
future.
They have used--we have counted--now over 30 times the word
``balanced.'' We have heard a balanced approach, a balanced plan; a
balanced approach, a balanced plan. But it does not balance.
Senator Coons, a great Senator, was a county commissioner. He
balanced his budget and gained acclaim for it, and it wasn't a balanced
approach--it was a balanced budget.
The Presiding Officer has been a Governor and balanced his budget.
All former Governors in this body balanced budgets--real balance.
A balanced approach means nothing, nada, zero. A balanced approach
means nothing. It is an excuse to tax and spend and not change the debt
course of America. At some point, every Senator is going to have a
moral responsibility to decide whether they want to stay on that
course.
The Ryan budget is not before us. This motion that I have does not
require the committee to have a Ryan budget. This motion would simply
say: Committee, go back and look at this budget. Committee, do a budget
that balances, and if you want to tax oil companies, if you want to tax
rich people more, lay it out. If you want to cut spending in some other
area than Ryan wants to cut spending, do so. But remember, Ryan does
not cut spending.
We see the chart up here. How much does Ryan cut spending? Ryan's
budget doesn't cut spending. Our proposal is not to cut spending. It
increases spending every single year. One of the ways this country is
going broke is, when they reduce the growth of spending, they say it is
a cut. That kind of logic is why we are going broke.
If we change the growth rate from 5.4 percent that we are on now to
3.4 percent, this budget would balance. We can grow spending every year
and balance the budget--no net cuts. Some programs ought to be
eliminated but no net cuts.
We are glad to have Senator Thune, who has served so ably on the
Budget Committee for many years, is thoroughly knowledgeable about
these issues and is part of the leadership in
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our conference and I yield to him on the resolution.
How much time remains on the resolution?
The PRESIDING OFFICER. Approximately, 16 hours, 30 minutes on the
resolution.
Mr. SESSIONS. Mr. President, I yield to Senator Thune.
The PRESIDING OFFICER. The Senator from South Dakota.
Mr. THUNE. Mr. President, I thank the Senator from Alabama for his
eloquence in laying out what is at stake in this budget debate we are
having and for also pointing out, once again, that the budget before us
in the Senate doesn't balance.
In a way, the speakers who have been here before on the Democratic
side have been talking about another budget. They are talking about a
budget that is under consideration in the other House, in the House of
Representatives. They are not talking about their budget.
I suspect one of the reasons they don't want to talk about their
budget is it is a budget that, for all intents and purposes, will hurt
economic growth, cost jobs, and lower take-home pay for middle-class
Americans because it doubles down on the failed policies of the past 4
years, which have consisted of more spending, more borrowing and more
taxes, and that is what this budget is about.
I wish to quote something from the Washington Post editorial page in
regard to the Democratic budget that is before us.
Except for the part about no imminent crisis, the Senate
Democratic budget recognizes none of this.
They are talking about the challenges we face with regard to the
fiscal crisis we are in.
Partisan in tone and complacent in substance, it scores
points against the Republicans and reassures the party's
liberal base--but deepens these senators' commitment to an
unsustainable policy agenda.
In short, this document gives voters no reason to believe
that Democrats have a viable plan for--or even a responsible
public assessment of--the country's long-term fiscal
predicament.
This is their assessment of the budget debate that is going on in the
Senate. The Washington Post editorial page isn't exactly a bastion of
conservative thought, but note what they say about this: It is not a
viable plan. It is not even a responsible public assessment of the
country's long-term fiscal predicament.
This is precisely what is wrong with this budget and why the
Democrats who come down to the floor of the Senate aren't talking about
it. They are coming down to talk about the budget that is under
consideration today in the House of Representatives--which,
incidentally, does actually balance in 10 years.
The first motion that is under consideration in the Senate is to
recommit this back to produce a balanced budget.
It strikes me, at least, that I think most Americans would accept the
logic, if you will--the notion, that we ought to be able to submit a
balanced budget--at least a budget that balances in a 10-year period.
Most Americans have to make decisions every single year. They have to
figure out how they are going to go about balancing their own family
budget, how to make what is coming in the door meet the expenses that
they have to deal with in their daily lives. Yet the Democratic budget
that is before us not only doesn't balance in 10 years, it doesn't
balance ever--it doesn't balance ever.
That is why this motion that is before us to recommit this budget to
the Senate Budget Committee and to produce a budget that actually does
balance is something I hope my colleagues on both sides will support.
It is time we got serious about doing the important work of the
Senate, taking care of the people's business, which is to get spending
on a more responsible and sustainable fiscal path so future generations
of Americans aren't saddled with this massive burden of debt, so we can
protect and save programs--important programs such as Social Security
and Medicare--which are on a pathway to bankruptcy.
Social Security is already operating at a cash deficit; in other
words, there isn't enough money coming in, in the form of payroll
taxes, to pay the benefits that are due to Social Security
beneficiaries. Medicare is going to be bankrupt 10 years from now and
even in the hospital part of that trust fund, by the year 2016,
according to the CBO.
It is clear. These things are looking us right in the face. This is
not something out there on the horizon, these are issues today that
need to be dealt with. Yet the Democratic budget before us does
absolutely nothing to address the long-term fiscal challenges facing
this country. What are we going to do to save Social Security and
Medicare and Medicaid?
In fact, according to the CBO, by the year 2023, 10 years from now,
mandatory spending will represent 91 percent of all Federal spending.
Think about that. It is about 62 percent today. We are on a trajectory
and a pathway over the next decade to where 90 cents--over 90 cents out
of every dollar is paying for those basic core programs with nothing
left over. How are we going to fund the military or defense or the
other priorities this government deals with every single day when over
90 cents out of every dollar is going to be spent on these programs?
Yet this budget does nothing to address those important fiscal
problems.
What it does do is it grows government--a 62-percent increase in
government spending over the next decade. It adds $7.3 trillion to the
Federal debt, and that is on top of the $6 trillion that has been added
in the last 4 years. It raises taxes. The Democrats will say it is only
by $975 billion, about $1 trillion. But if you look inside the numbers,
they replace the sequester--another $\1/2\ trillion--with a fund, some
sort of fund. What is going to fund that? Spending cuts? I do not think
so. We are talking about up to a $1.5 trillion tax increase in this
budget on top of the $1.7 trillion tax increase we have already seen
under this President and the Democrats here in the Congress.
What does that mean? They say it is just a tax on the rich. We just
need the rich to pay a little more. They need to pay their fair share.
They got a big, fat tax increase with the fiscal cliff. They got a
big, fat tax increase with the $1 trillion in ObamaCare. The rich are
getting hit with higher taxes, but what is happening is a lot of these
tax increases are starting to hit the middle class, and they are
starting to figure this out. If you are a middle-class American and
they are saying: Let's soak the rich a little more, that is OK, the
rich can pay more--Mr. President, I have to tell you, it is coming at
you. If you are a middle-class American, you cannot tax the rich enough
to do all the things these guys want to do to increase Federal spending
and grow the size of the Federal Government.
Our focus should not be on growing the government; it ought to be on
growing the economy. This budget does absolutely nothing to get the
economy growing again. It simply does what we have done in the past 4
years; that is, increase spending, increase borrowing, and increase
taxes.
If you don't think the taxes are hitting the middle class already,
just look at your health insurance premiums because the tax increases
in ObamaCare were taxes on, yes, medical device companies, taxes on
your health insurance plan, taxes on pharmaceuticals, all of which are
being passed on in the form of higher costs to average working
Americans.
We have a crisis in this country that affects the middle-income
families, people who are out there every single day just trying to do
their best to make their budget balance and do the important things to
plan for the future of their children and grandchildren, and here we
are in Washington, DC, debating yet more policies that are going to
hurt the economy, going to crush job creation in this country and lower
take-home pay for those very middle-class American families.
This is the wrong approach. I hope as we debate this we will have an
opportunity to vote on amendments. Perhaps there is a way we can make
this better. I doubt that to be the case. This budget is so far off in
terms of where we need to be going as a country. If we are serious
about getting the economy growing and expanding again, creating jobs
for middle-class Americans, and doing something about the massive
amount of debt we are passing on to future generations, this budget is
the exact wrong prescription for that. We can do much better by the
American people, and we need to. I hope that during the course of this
debate that will
[[Page S2063]]
become clear and that we will move in a different direction for the
future of this country.
I see the leader is here on the floor. I will conclude my remarks at
least for the time being and allow him to make his.
The PRESIDING OFFICER. The Republican leader is recognized.
Mr. McCONNELL. Mr. President, I thank my colleague from South Dakota.
He is entirely correct. This budget is extreme, and it is unbalanced.
What would happen if it passed? We would have a tax hike of up to $1.5
trillion. That would be the largest in U.S. history. It would cost the
average middle-class family literally thousands.
Democrats here in Washington, as Senator Thune and Senator Sessions
pointed out, already just got billions of dollars in new taxes at the
end of the year--about $600 billion because the tax law expired, the
fiscal cliff; then they got $1 trillion more out of ObamaCare. So this
would be on top of all of that--$1.5 trillion on top of the $1.6
trillion that is already going into effect. And there is a nearly two-
thirds increase in big government spending.
It would siphon $\1/2\ trillion out of our economy and into the hands
of Washington bureaucrats and the people in Congress to spend; 42
percent more debt, with each American owing up to $73,000; and an
average of 850,000 fewer jobs every year. That is about 11,500 jobs in
the Commonwealth of Kentucky. Medicare would be allowed to go bankrupt
in a few years, and this budget would not balance--not this year, not
tomorrow, not ever.
A lot of Democrats here in Washington are saying they simply don't
care about balancing the budget anymore. It certainly shows with this
one. Their budget will not give Americans a better economy. There won't
be any real job creation or the kind of deficit reduction we all know
the country needs, just a massive tax hike and more spending to grow
the bureaucracy from the pockets of the middle class out.
Our Democratic friends here in Washington like to say that budgets
are not just about dollars and cents, they are about values. What their
budget tells me is that they have completely lost touch with the hopes
and concerns and aspirations of their constituents, that they are
putting the needs of government ahead of those who elected them. The
budget we waited 4 years for--4 long years we have waited for a
Democratic budget--is just a rehash of the extreme policies that
continue to pummel the middle class. As all of us have said, it is time
to grow the economy, not the government.
I yield the floor.
The PRESIDING OFFICER. The Senator from South Dakota.
Mr. THUNE. Mr. President, we have among the many people who serve in
the Senate some people who have balanced budgets and done it----
The PRESIDING OFFICER. Who yields time to the Senator from South
Dakota? The Senator from Alabama?
Mr. SESSIONS. Mr. President, I yield to the Senator from South Dakota
such time as he and Senator Johanns would utilize.
The PRESIDING OFFICER. The Senator from South Dakota.
Mr. SESSIONS. Mr. President, if you would, that would be from the
resolution.
The PRESIDING OFFICER. I thank the Senator.
The Senator from South Dakota.
Mr. THUNE. We have among the Senators who serve in the Senate people
who have balanced budgets and done it the old-fashioned way, the hard
way, one of whom is the former Governor of the State of Nebraska, now
Senator, Mike Johanns. Senator Johanns, like me, comes from the
midwestern part of the country where common sense prevails and where
people are not unaccustomed to having to tighten their belts a little
bit during difficult times. As a consequence of that, many of those
States in that part of the country are well managed, and they elect
leaders who bring those types of principles to their leadership and to
the way they govern among their States.
So the Senator from Nebraska, Mr. Johanns, has a long record--not
only as a Governor, I might add, but as a mayor. He has been an
executive. He knows what it is like to make those hard decisions, and
he is someone who, like me, is very concerned that we get on a more
sustainable fiscal path for this country, get our fiscal house here in
Washington, DC, in order, and make sure we are not bankrupting this
country and saddling the next generation with massive amounts of debt.
I yield to my colleague from Nebraska, Senator Johanns.
The PRESIDING OFFICER. The Senator from Nebraska.
Mr. JOHANNS. Mr. President, I thank the Senator from South Dakota for
a nice introduction. I appreciate the opportunity to speak today on the
budget that has been proposed by the majority party.
If I might lay a little groundwork, in addition to what the Senator
from South Dakota said about me, my time in elected office dates back
to 1983. I was first elected to be a county commissioner in Lancaster
County. After that, I went to the Lincoln City Council, where I served
for a couple of years, primarily because I had concerns about where the
budget of the city of Lincoln was headed. I ran for mayor of Lincoln,
and I served two terms as mayor of the city of Lincoln in a strong
mayor form of government. From there I went to the Governor's office of
the State of Nebraska, and from there I went on to become Secretary of
Agriculture in the Bush administration, and 4 years ago I joined the
Senate after running for election.
I have dealt with government budgets all of my career. I worked on my
first budget when I was 32 years old. The one thing I knew was that it
had to be balanced or it was not going to work. I have submitted
budgets over and over again through those years, all balanced.
But let me focus a little more intently on the State of Nebraska and
my time as Governor there. Nebraskans have a very practical approach to
spending money. It is very straightforward. If you don't have the
money, you don't spend it. It is that straightforward. You see, in our
constitution, when the founders of our State wrote our State
constitution, they worried about the very thing that is happening with
this budget being presented by the majority. They worried that there
would be politicians who would figure out that if they just kept
borrowing and spending, they could get themselves reelected over and
over. But they also realized that was no course for a State, so they
put into our constitution that the politicians could borrow $100,000. I
suspect that when our constitution was written over 100 years ago, many
at that time looked at $100,000 and said to themselves: That is a
handsome amount of money. Obviously, in today's world, $100,000 doesn't
get you very far. In those years--post-9/11, I might add, when the
economy had tanked because of what happened on 9/11--we were not only
balancing the budget, we were not borrowing money to do it.
The other thing I would say is this. The Presiding Officer
understands this as a former Governor. There was always a day of
reckoning for the Governor. It was called the State of the State
address, when you would walk into a chamber like this and you would lay
out your plan for the State, and every media outlet in the State was
there examining every word of the budget you submitted, every single
senator was listening to every word you had to say, and if you laid out
a plan that did not work or was filled with gimmicks, then the
editorials the next day were devastating. You could never do that.
Let me compare that experience over those many years doing those many
things with what I am faced with today as a Senator. This is what I am
faced with. In order to support this budget, I, a former Governor,
mayor, county commissioner, city council member who has balanced every
single budget I ever submitted, would have to go home to Nebraskans and
say this: My fellow Nebraskans, I just supported a budget that has over
a $1 trillion tax increase. I would have to go on to say: That would be
on top of the $600 billion tax increase last year. That would be on top
of the $1 trillion of new tax increases in ObamaCare, and that is what
I would have to say in order to support this budget to the citizens of
Nebraska. I would also have to say to them that notwithstanding the
fact that I have balanced your budgets for over 30 years in every
budget I ever submitted, our Nation's debt in this budget will grow by
$24.4 trillion by the end of the 10-year budget cycle. That is $7.3
trillion in new debt.
[[Page S2064]]
Let me just offer a thought on that. One could argue that at my age,
age 62, maybe that doesn't mean a lot. After all, the Good Lord
willing, I am probably not going to be on this Earth forever. It is
just the way it works for human beings. Let me look around and see who
is going to pay for this. Well, I know this weekend when I go back
home--if we get back home--I am going to see my kids and grandkids. My
kids are in their thirties. I am going to see my grandkids who range in
age from 5 to 13. I am not going to have to look very far because if I
vote for this budget, I am saying to my kids and my grandkids: I hope
your life turns out OK because you are taking on, at the end of this
10-year budget window, $24.4 trillion of debt.
Now, let me compare that to how I started my adult life. When I was
20 years old, this Nation owed $380 billion of debt. So what I am
saying to my kids and grandkids is I supported this budget, because
here is where you are going to end up. You are going to end up starting
your adult life with about $25 trillion of debt. I started my life with
$380 billion. So when there is a war--which I wish I could say it will
never happen, but it does--when there is a flu pandemic, when you want
to do something more to educate your children, you are going to be
hampered.
They are going to be paying back the debt I ran up during my life if
I support this budget. This budget balloons the debt by 42 percent.
That is what I will tell my kids and grandkids when I go home this
weekend if I vote for this budget.
Net interest on the debt over the 10 years will total $5.2 trillion.
What do we get out of that? What can we tell our kids and grandkids
they get out of that? Well, they get to pay China back for lending us
money. No schools will be built, there are no new teachers who will be
hired, and there is no better health care which will be provided. That
is just to service the debt our generation is running up.
Our debt, as a percentage of the gross domestic product under this
budget, never goes below 90 percent of our economy. Actually, for 4 out
of the 10 years it is over 100 percent. Every economist will say if we
get into that stratosphere, the warning lights will be going off, the
flags will be waving--stop, stop, stop borrowing the money. If I would
have suggested anything like this as the Governor of Nebraska or the
mayor of Lincoln, I would have been laughed out of the chamber.
Annual deficits. Even with all of the tax increases and gimmicks
under this budget, we never get under $400 billion a year in new debt
we are taking on. It ranges between $891 billion annually--on top of
the nearly $17 trillion we owe today--to $407 billion annually. We
never get close to a balance.
Senator Sessions says it so well: Balanced? What is balanced about
this? I have been balancing budgets my whole life. This is not
balanced. This is crazy. This is insane. This is adding debt to the
shoulders of our children and grandchildren who are already up to their
eyeballs in debt because of the spending that is going on.
Looking at the spending, it actually increases. Today's budget is
$3.6 trillion. Under this budget--if I vote for this--it will go to
$5.7 trillion in 2023, and that is a 60-percent increase.
Entitlements. You know what. I am 62 years old and in June I will be
63. Two more years until Medicare, and a little bit after that I will
receive Social Security. People have talked about this great benefit
that Senators get. Well, I said to a group back in Nebraska, at 65 I am
going to get this great benefit. I am not going to have to pay much for
it, and it is going to pay for my health care costs until the moment of
my death. Everybody was looking at me. Wow, what is that plan? I said:
Ladies and gentlemen, it is Medicare.
I said: At a point in my life where I could afford to pay something
for it--and I would be happy to do that. I am not the richest person in
the Senate, but I am not the poorest either. So I am going to go on
this program and pass it on to my kids and grandkids. Is there anybody
here who wants to get up and say: My gosh, that is fair.
That is not fair. We should not be doing that. It is not right. What
does this budget do to address that problem? Nothing.
In a townhall meeting I was at in Lincoln recently, I said: If you
are 62 years old, it is probably going to work out for you. We will
probably borrow enough money to get Medicare and Social Security
throughout my life. For those 40-year-old Members in the Senate or
citizens who come to my townhall meeting, I am sorry, but I cannot make
that promise to them. The trustees are telling us we cannot make that
promise.
We waited 4 years for a budget from the majority. Year after year the
majority leader would come down, stand right there and say: We are not
going to be doing a budget this year. I wonder what the city council
meeting would have been like if I would have gone down in Lincoln, NE,
and said: I have been thinking about this, and I will not be doing a
budget this year for the city of Lincoln. As Governor, I cannot imagine
walking into our chamber back home and saying: I have been thinking
about it, and I will not be doing a budget this year. Justifiably so,
the people of the great State of Nebraska would have been looking for a
new Governor and trying to figure out how to run the existing Governor
out of office. Yet that is what we have been doing for the last 4
years.
We have waited 4 years, and we finally get a budget that does nothing
for this country except increase taxes, increase the debt, increase
spending, increase borrowing, and lay it off on our kids and grandkids
with whom we will all go home and spend time this weekend--if we get
out of here. It is not right.
Even the newspapers have figured it out. USA Today says:
Disappointing . . . namby-pamby plan that underwhelms at
every turn . . . neither balances the budget or reins in
entitlements.
Now, I read the Washington Post, but I have to say, they are not
always the most favorable to Republicans, and that is the
understatement of the day. Here is what the Washington Post said:
``Gives voters no reason to believe Democrats have a viable plan.''
Boy, talk about a condemnation of a plan.
The Wall Street Journal said: ``Much higher taxes to fund much higher
spending to finance a much bigger government.''
The Hill said: ``The Murray budget does not contain net spending cuts
with the sequester turned off.''
I talked at length today about going home and explaining what a
``yes'' vote would mean on this budget. I am not going to do that. I am
not going to go home and tell people I voted for this budget. I just
want people to know right now that I will be a ``no'' vote on this
budget. I will be a ``no'' vote because somebody has to stand for the
people who are ultimately going to pay the bill.
We cannot pull the wool over the eyes of Nebraskans. They are just
too darn discerning. They do not believe for a moment that all of this
debt and spending and taxation is going to be financed by the rich
guys. They realize that at the end of the day, this is going to visit
home, and this is going to hammer the very people who are out there
ranching, farming, running small businesses, and trying to pay their
bills and educate their kids so maybe even they can leave a little
something behind for the grandkids. That is what we are facing.
We are facing literally a situation where if we don't stand up to
this, the day is not very far off where people's Social Security is in
jeopardy, their Medicare is in jeopardy, Medicaid is in jeopardy, and
we leave our children and grandchildren with this massive pile of debt.
There is just no way to deal with it unless we just slam their standard
of living and tax the living daylights out of everybody, and that is
where this is headed. There is no way I could justify this vote back
home.
I proudly announce that today I will be a ``no'' vote on this budget
resolution, and I will do everything I can to stop it. It is the wrong
course for our country.
I yield back to the Senator from South Dakota.
The PRESIDING OFFICER. The Senator from South Dakota.
Mr. THUNE. Mr. President, the Senator from Nebraska could not have
put it better. He has great experience with budgets and the people of
Nebraska, who are similar to the people I represent in South Dakota.
Someone else who is also from a very similar State, the State of
North Dakota--he is yet another Governor who,
[[Page S2065]]
when he came here, came here in many respects because of his record of
accomplishment as a Governor. The people of North Dakota elected him by
an overwhelming margin largely because he knows how important it is
that a State and country live within their means and that they not
spend money they do not have. The Governor, and now Senator, of North
Dakota has a long and incredibly strong record when it comes to fiscal
matters. Again, like me, he represents a constituency which understands
very clearly what is at stake when it comes to balancing our budget and
making sure we are not handing that debt down to those children and
grandchildren.
It is great to have here the Senator, my colleague and neighbor from
North Dakota.
Mr. HOEVEN. Mr. President, I thank the distinguished Senator from
South Dakota.
I am pleased to be here to discuss this very important issue, the
matter of our budget, for this great Nation and to follow my
distinguished colleague from Nebraska. I have had a tremendous
opportunity to work with both of these Senators. Senator Thune and I
have been friends for many years and have worked on many issues
important to this country and the Dakotas. Likewise, I have had an
opportunity to work with Senator Johanns when I was Governor of North
Dakota; he was Governor of Nebraska.
I want to pick up on some of his comments, but I am going to start
out in a broader sense; that is, we are here today to debate a budget
for this country. It is something we need to do. It needs to be a
budget that moves the country forward. It needs to be a budget that
helps us meet the challenges the American people want us to address. It
needs to be a budget that sets the right priorities. It needs to be a
budget that will help us truly reduce our debt and our deficit, and
that means it needs to balance. It needs to be a budget that balances
in a timely way. It needs to balance without raising taxes.
We have millions of people in this country who want a job. They want
to get back to work, and raising taxes will absolutely hurt our
economic growth and hurt their ability to get a job and to get back to
work. At the same time we are talking about reducing our deficit and
our debt. That means we have to control our spending and find ways to
cut and reduce spending in an intelligent way, but at the same time we
need economic growth. We cannot have higher taxes to hurt that economic
growth, which kills jobs, but also it is that very economic growth, not
higher taxes, that produces the revenue--again, combined with the right
kind of controlled spending reductions--that gets our debt and deficit
under control. The fact is this budget doesn't meet those very
fundamental tests. It raises taxes by $1 trillion--more than $1
trillion. That would be the largest tax increase in the history of our
country. That will hurt our economy. That will hurt our ability to get
people back to work. That will hurt the economic growth we need to
actually create revenue to address the debt and the deficit. So more
than $1 trillion in higher taxes that will truly hurt our economy. Yet,
even with a $1 trillion tax increase, the budget doesn't balance. Think
about that: $1 trillion in tax increases and the budget doesn't
balance. Does that make sense? I don't mean it doesn't balance this
year; I don't mean it doesn't balance in 10 years; it doesn't balance.
So we can go through all the individual numbers and talk about all
the different aspects of this budget in great detail, and we will. But
for starters, on a fundamental basis, the Presiding Officer was a
former Governor, as was my colleague from Nebraska, and there are
others in this Chamber. We were required by the constitution of our
respective States to submit budgets that balanced, and balanced every
single year. This budget raises taxes by over $1 trillion on the
American people, the largest tax increase in the history of our
country, and it never balances. That is not setting the right
priorities.
The Senator from Nebraska spoke a little bit about how he as a
Governor approached presenting a budget, and it is something every
Governor has to do. They have to present a budget to their respective
legislatures that sets the right priorities.
When I did that budgeting process, the way I approached it was to
say, OK, our budget first has to fund the right priorities. We have to
set priorities. There is always more demand than there are resources
available, so we have to determine what the right priorities are and
fund those priorities in the best way we can. We can't fund everything,
so we have to set the right priorities.
Second, in our State--and I know in many States--we said as well that
we also needed to have a rainy day fund. We needed to be prepared for
the future. We shouldn't be running big debt and deficits; we should be
having reserves for a rainy day. We should have an adequate reserve
fund for the future.
Third, we always looked to determine how we could reduce the tax
burden on our hard-working citizens, the taxpayers of our respective
States or the taxpayers of this country.
So fund priorities, build proper reserves, be fiscally sound and
responsible, just as we do for our homes and businesses. We want to
make sure we are in strong financial shape, we are fiscally solid and
sound, have a reserve, and reduce the tax burden on our hard-working
taxpayers. This budget does none of those fundamental things that go
into building the right kind of budget. That is why I can't support
this budget and we should not pass this budget.
As we look at our country today, we have to get people back to work.
We have to get our economy growing. We have to reduce our deficit and
our debt. We need to do it for our well-being today, for the well-being
of our country today, and we need to do it for our children. This is
about our kids. This is absolutely about our kids. So that means we
have to have a budget that reduces our spending, that sets the right
priorities, that controls and reduces spending. At the same time, we
need progrowth tax reform and not higher taxes that hurt our economy.
We need progrowth tax reform that gets our economy going, that gets
people back to work. And with a growing economy, we get revenue from
growth, not higher taxes. We need to reform our vital programs. We
need, in a bipartisan way, to reform our programs such as Social
Security and Medicare so we preserve and protect them for the long run.
That is what the American people want. That is what the American people
are asking us to do.
So as we set this direction with this budget--something that is
incredibly important for our country--with all of these different
aspects, we have to have the right priorities. This budget does not
have the right priorities.
Members have to ask themselves as they vote on this budget: Does this
budget set the right priorities? Does it properly control our spending?
Will it put our fiscal house in order? Does it increase or reduce the
tax burden on our hard-working taxpayers? We should ask ourselves those
questions as we deliberate.
I know the American people will be asking those same questions. Those
are the priorities that have to be fully evaluated and properly
addressed in any budget, and this budget doesn't do that. For that
reason I cannot support it, and I believe it should not be passed. I
believe we should go back to work and create a budget that truly does
those things: controls spending, sets the right priorities, doesn't
raise taxes, and that truly does what the American people want and need
us to do.
With that, I turn again to my distinguished colleague from South
Dakota. I thank him for leading this colloquy, and I look forward to
working with him on this very important issue.
Mr. THUNE. Mr. President, I thank the Senator from North Dakota. I
think he put it absolutely right in terms of what the priorities should
be and what the stakes are in the budget debate. I thank him for his
leadership on this issue.
I want to close with one final point he made. He spoke a lot about
the impact on the economy and what happens when we get economic growth.
His State is a good example of this, because the State of North Dakota
has a growing economy. And when we have a growing economy, we have
people who are making money, people who are working, people who are
investing, and that means people are paying more taxes, and that is how
we get more revenue. What we need is a growing economy.
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In the last 4 years, the average growth rate is less than 1 percent,
eight-tenths of 1 percent. The 60-year average of economic growth,
post-World War II, is 3.3 percent. So we are growing at less than 1
percent. In the last 4 years we have added $6 trillion to the debt, and
we still have 12 million people unemployed and an unemployment rate
that continues to hover around 8 percent.
Having said that, wouldn't we think we would want to try something
different and go in a different direction? Yet this budget doubles
down. It flat doubles down on these failed policies of the past 4 years
that are antigrowth, antijobs, and continue to tax and spend and borrow
as if there is no tomorrow. We need a different path. We need a
different approach.
So I hope, as we have this debate over the course of the next couple
of days, it will become clear not only to the Senators here in this
Chamber but to the American people who really is interested in getting
revenue the right way, which is through growing our economy, creating
jobs, getting Americans back to work, and doing something about the
debt and the spending crisis we have in this country.
I yield the floor.
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. Mr. President, I yield 60 minutes to the Senator from
Virginia. Both Senators from Virginia are here. They are both great
members of our committee who have contributed a great deal of time and
effort in helping us get on to a path of sustainable economic recovery
and deficit reduction. I appreciate the work of both of them.
I yield to the Senator from Virginia to offer a resolution.
The PRESIDING OFFICER. The Senator from Virginia.
Mr. WARNER. Mr. President, let me, first of all, thank the chairman
of the committee for her great work in putting together what is this
first step toward getting this issue that has plagued this body and
plagued this country behind us.
This budget, as I have said to her and others, wouldn't have been the
exact one I would have drafted. However, it reflects the varying
concerns of the Democratic caucus. It is a budget that is credible,
that is real, that moves us forward, and that has as part of its core
all of the critical ingredients.
Anyone who has looked at this problem--I know the chairman of the
committee has, I know the ranking member has; many of us have wrestled
with this; all of the bipartisan groups have wrestled with this issue--
have all said we have to do three or four things. No. 1, we have to
have additional revenues. No. 2, we have to do entitlement reform. No.
3, we do need, yes, smart, targeted cuts on both the discretionary side
and the defense side.
The Democratic budget, compared to what has now been as I understand
in the last hour passed by the House, is the only document, the only
budget that has all four of the component parts of any solution that
will get this problem of the $16.5 trillion debt that our Nation faces,
and a debt that goes up by $3 billion a day, to start putting a
realistic, real plan in place to attack this problem in a real way.
I wish my colleagues from North and South Dakota were still here,
because I, as was my good friend and colleague, the Senator from North
Dakota, was a Governor as well and, yes, we had to balance our budgets.
I and my colleague, my great friend, the junior Senator from Virginia,
was a Governor as well. I have to tell my colleagues, I will match our
record of fiscal responsibility in Virginia and progrowth policies in
Virginia with any State in the Nation. Independent rankings have named
Virginia the best managed State in the country, the best State for
business, the best State for educational opportunity. Those are not my
words, not the words of the Senator from Virginia, but independent
validation.
How did we get there? Well, the remarkable thing was what we had in
Virginia because of actions of prior administrations. When I came in
and when the Senator from Virginia was my lieutenant governor, we had a
structural budget deficit. How did we have that structural budget
deficit? One, because we had spent too much, yes, but also what we put
in place was a tax code and a revenue stream that would never meet the
needs of basic operations of government.
That analogy is actually what we face now in the United States of
America. Yes, we do need to find ways to limit our spending. But what I
find curious from all of my colleagues who talk about this issue is
their constant focus on the spend side with virtually no mention of
what we in this Nation have done on the revenue side.
Anybody who can read a balance sheet--and I take great pride in the
fact that I was a businessman long before I was a politician--realizes
we have a revenue side and spending side. If we take a moment and look
at what previous Congresses have done on the revenue side, back in
early 2002, 2003, we put in place a tax cut that cut $4.5 trillion out
of the revenue stream over 10 years. We had an expectation we would see
budget surpluses as far as the eye could see. Well, I think there is
not an economist anywhere or, for that matter, virtually any elected
official, who would at least acknowledge privately that in retrospect
that was a tax cut of unsustainable proportions. What is particularly
remarkable when we talk about growth is that some of the period of our
Nation's highest economic growth took place during the 1990s under
President Clinton when we had a Tax Code that generated that additional
$4.5 trillion of revenue over a 10-year period.
What is remarkable about all of the debates and all of the groups
that have looked at this, all of which have included new revenue back
into the revenue stream along with targeted cuts, along with
entitlement reform, is that every one of those independent reviews of
our problem has said the only way we get a balanced approach to get
this debt and deficit under control is yes, cuts, yes, entitlement
reform, but, yes, additional revenue as well.
The plan that is most often cited on this floor is the Simpson-Bowles
report. Simpson-Bowles, on a 10-year basis, based upon the baselines
they used in 2010, would have generated $2.2 trillion of net new
revenue--$2.2 trillion of net new revenue. Again, thinking about that
in the context of what we cut, that is less than half of the amount of
taxes we cut back in 2003. So even the most ambitious proposal has said
we do not need to go back to the Clinton tax rates when our country was
prospering at unparalleled rates. We do not need to put back all of
that revenue. We do not even need to put 50 percent of that revenue
back in. But we do need to put somewhere between one-third and 40
percent of the revenue back into the revenue stream to make sure we
correct the structural deficit on both the spending side and the
revenue side.
What does this budget do? Well, we put $600 billion back in on New
Year's Eve in a deal where many of us maybe had to hold our nose or our
breath on, but it was back in the revenue stream. We put on top of that
now another $1 trillion back in--$975 billion back into the revenue
stream. That puts us at $1.575 trillion of net new revenue back in--
$1.575 trillion--literally only one-third of the revenue that was taken
out with the $4.5 trillion tax cut in the so-called Bush tax cuts.
So I find it a little strange for those who are saying: Let's look at
the country's balance sheet--and, yes, we have to cut spending--not to
reflect back upon the incredible growth we had back in the 1990s and
recognize we have both a structural problem on the spending side but
also a structural problem on the revenue side.
I have to tell you, from any kind of reasonable standpoint, putting
one-third of the revenues we took away back into the revenue stream
seems to me to be a reasonable, balanced, thoughtful, and, candidly, on
any kind of operational basis, business basis, fiscally conservative
approach.
I have colleagues here, and I want to engage in a conversation about
sequester, but I also have to make one other point that particularly
bothers me about what the House, which just passed their budget, did
and I assume that many of my Republican colleagues, I guess, are
endorsing.
I 100 percent agree with my colleagues that we have to have a growth
agenda in America. You cannot, no matter how much you cut, cut your way
to prosperity. And you cannot--and I know our Republican colleagues
agree--you cannot spend your way and tax your way to prosperity. You
have to have a growth agenda.
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Well, for 20 years before I got into politics, my business was
investing in businesses that were growth businesses. I was a venture
capitalist. I was proud to cofound Nextel, close to 70 other
technology-related companies. Anybody who was an investor in
businesses--whether you were me or whether you were Mitt Romney at Bain
Capital--looked at a couple of key components of any business in which
you would invest. There were generally three items you would look at on
any business plan. One was, did that business invest in its workforce,
because in a global economy there is a global competition for talent,
and the most important criteria you can look at, if a business is going
to be successful, is, are the workers going to be trained and are they
going to be able to compete and do the job?
The second thing you would look at--of any business I would look at--
is, does that business have a plan to invest in its plant and
equipment? Whether you are creating software or making widgets, are you
going to stay current in a very competitive marketplace with how you
make things?
The third issue is, no matter how successful your business is today,
are you going to stay competitive in this global economy and how do you
stay ahead of the competition, because no matter how good you are
today, somebody tomorrow is going to come up with a new idea.
I would invest in businesses that met those three criteria. I would
say that former Governor Romney had a very successful record at Bain in
many cases. I bet he looked at those same three criteria.
Countries, in a very similar way, have their own business plans, and
budgets kind of reflect those business plans. We may call it different
items, but we have those same three criteria: workforce, plant and
equipment, staying ahead of the competition. We just call it different
items. We call it our investment in education and workforce training.
In terms of plant and equipment, we call it our investment in
infrastructure because how well your economy, how well your country is
going to do is how well your roads, your rail, your ports, and your
broadband are, how well you can move goods and equipment in an
efficient and effective manner. The third item is, how do you stay
ahead of your competition? Well, in the global economy, staying ahead
of your competition means, what is going to be your value added? That
is going to be your intellectual capital and your ideas. That means
research and development.
Well, under the growth agenda criteria, under the business plan
criteria, under the investment criteria, the House budget that just
passed--and I hope I find my Republican colleagues will contradict me
and say: No, no, we do not want to do this, but the House budget that
just passed takes Federal domestic discretionary spending, which is
currently only 16 cents on every tax dollar that we spend in America--
and for those viewers, in English, non-Washingtonese, domestic
discretionary spending is, yes, money we spend on the environment and
energy and law enforcement and early childhood, but it is also the
money we spend in the Federal Government on education, infrastructure,
and research and development. It takes that 16 cents--not a very high
number right now even--and takes it over about a 20-year period to less
than 5 cents.
I have to tell you, I would never invest in a business that spent
less than 5 percent of its revenues on its workforce, its plant and
equipment, and staying ahead of the competition. I would never invest
as a nation in a nation that is spending less than 5 percent of its
revenues on the education of its people, the infrastructure of its
nation, and the research and development to stay ahead of the
competition.
I tell you, I have spent a lot of time as somebody who looks at what
some of our competitive countries are doing. China is spending, just on
infrastructure, four times the percentage of their GDP what we are;
India, significantly more as a percentage of their GDP on education;
even Europe, with all its challenges, significantly more than what this
House budget would spend on America's business plan, on America's
growth agenda.
I have to tell you, I would never invest in it. I have to tell you, I
would really question if Governor Romney, whom I have great respect for
with his business acumen--I do not think Bain Capital would ever invest
in a business plan for America that spent less than 5 percent of its
revenue on its growth agenda and its ability to stay ahead of the rest
of the world.
So I hope over this coming debate we can talk about growth agendas,
we can talk about revenues, we can talk about balance, we can talk
about looking at our plan from any historic perspective. But what I
want to turn to now--and I apologize to my colleagues who are on the
floor--is the question of sequester.
Back in August of 2011, when we got close to the budget ceiling
debacle--not exactly a high point for this institution or Congress, and
we could debate about who had the idea or where it came from
originally, but what was curious about that was we set up a process
that said: We are going to figure this out in a way where we will never
get to sequester.
I use the analogy for sequester--some of us are old enough--my good
friend, the Senator from Maine, may recall the movie ``Blazing
Saddles.'' In that movie, ``Blazing Saddles,'' the sheriff comes out
and puts a gun to his head, and all the townspeople come up and say: Oh
my gosh, the sheriff may pull the trigger.
We in Congress set up that circumstance with the sequester, and
unfortunately 2 weeks ago we allowed that trigger to be pulled. Because
I believe, as somebody who cut spending as the Governor of Virginia--
and I know my colleague, the new Senator from Virginia, cut spending as
well--we know how to make cuts. But there are smart cuts and smart ways
to cut, and there are stupid ways to cut, and there could not be
created a more stupid way to cut than sequester.
There are 975 separate line items in the Navy budget. Those 975
separate line items in the Navy budget are not of equal value to the
taxpayer, nor are they of equal value to the defense of this Nation.
But within the framework of sequester, we do not have any ability to
pick and prioritize the way any reasonable business leader or any
reasonable Governor would. We had to cut them all of an equal amount.
The remarkable thing that is happening--and, again, my friend, the
Senator from Virginia, will talk to this more--is that there is example
after example, under the name of sequester, that supposedly we are
cutting spending where we are actually going to cost the taxpayer more
than any perceived savings. I will just cite two examples before I turn
to my friend from Virginia.
For those viewers, the American government actually does get certain
things right. We have even gotten a law that if we do any bulk
purchases, we have to get at least a 10-percent discount. If we buy 10
tanks instead of 1 tank, we get a discount. If we buy more than one
Virginia class submarine, we get them at $2 billion apiece. If we buy
them individually, they cost $2.5 billion apiece.
Under the name of sequester, if this is allowed to continue, we will
have times where we will have to violate those contracts and not only
pay a penalty cost but then not receive the government discount because
of volume purchasing. It does not mean we are not going to still have
to buy the same amount; it just means it is going to cost the taxpayer
more money.
In the case of research, the National Institutes of Health does some
remarkable work, but anybody who follows medical research knows you
cannot normally finish a research project in a single year. So it may
take 4 or 5 years to do a cancer research project. If we allow
sequester to continue, you may have 4 years of a cancer research
project done, but because you cannot discriminate between projects, you
cannot let that fifth year of the contract, so the first 4 years of
that research is flushed down the toilet.
My colleagues, there has to be a better way to deal with this. Our
budget, which replaces sequester with half revenues and half more
targeted spending cuts, I believe moves us in that right direction. We
in Virginia, in many ways, are ground zero of the effects of sequester.
Many States have not begun to feel it. They will at some point.
I would like to turn to my colleague, my good friend, the new Senator
from Virginia, somebody who serves now on the Armed Services Committee
and has
[[Page S2068]]
made hard choices as Governor as well, who knows what it takes to have
a balanced approach to continue to grow the economy. He has continued
the kinds of accolades that Virginia has received. I would like to ask
the Senator from Virginia if he would be willing to explain in a little
bit more detail some of the challenges we face at ground zero in
Virginia around sequester and why the approach we have taken in our
Senate budget is better than the status quo approach we are now having
to deal with.
Mr. KAINE. Mr. President, I would be happy to address that question
from my senior Senator and good friend, Mr. Warner. As he indicated--
and I think I can maybe say it a little bit more strongly than he could
because he would be a little bit modest. I know of many people in this
body who have great experience in governance, great experience in the
business sector. I do not know of anyone who has worked harder on
issues of fiscal responsibility and who has a greater track record in
the business world of understanding what true fiscal responsibility is
than my colleague Senator Warner, and I am glad to engage in this
colloquy with him.
I also want to thank our chairwoman, Senator Murray, for a job well
done in helping shepherd this budget through committee to the floor.
This debate, both in committee and here on the floor, that will take
place in the next few days will illuminate important choices we need to
make as a nation and will illuminate important differences between the
Senate's approach and the House's approach.
I echo comments Senator Warner made. This Senate budget is a
compromise, like all are, and there will be more compromise that should
take place in any normal process. But the budget does a very good job
in a number of ways. It tackles the task, the challenging task of
deficit reduction to get us to figures that would be very much the
equivalent of what had been recommended in the Simpson-Bowles report,
as Senator Warner indicated. It focuses upon economic growth, a growth
agenda, which is the most important thing we need to be focused on in
this body, and it does it in a balanced way that incorporates real
savings and also appropriate reform of revenues.
It is impossible to fix a balance sheet by just focusing on one side
of the balance sheet. Business leaders know this. Governors know this.
Everyday Americans know this. I commend Chairwoman Murray and the other
members of the committee, and I echo the comments made by my colleague,
Senator Warner, about the budget having the critical components.
I feel very confident, if this budget were enacted as is with no
change to an apostrophe, comma, or a line item, this budget would be a
positive result for the American economy. It would promote growth, and
it would find us continuing on a path to responsible deficit reduction
to reach the levels of debt, deficit, or GDP which are appropriate from
economic terms.
I would not say the same about the House budget. If it were enacted
without a change, comma, or apostrophe, it would not be a positive
thing for the American economy--it could be somewhat catastrophic or
cataclysmic for the economy.
To get to the question, my senior Senator and friend has asked me
about the effects of sequester in Virginia. As some of you might know,
I took the floor for my maiden speech on this topic last month--a
little bit earlier than I would have wished to have spoken as a
freshman Senator. With the spectre of the sequester having such a
significant effect on the Commonwealth of Virginia, I felt I couldn't
be silent on it. A Senator colleague from Hawaii is here, Senator
Hirono, who I know feels equally strongly about this issue.
I took a tour throughout Virginia in the middle of February, which
was designed as sequester was looming. We spoke to people who were
affected, especially in the armed services area. I heard their stories
about the sequester and the anxieties and threats it posed. Beginning
in early April, 90,000 DOD civilian employees will begin to be
furloughed in the Commonwealth of Virginia, hundreds of thousands
nationally. This will have a very significant effect on the kitchen
table, family pocketbook discussions which are happening all over the
Commonwealth. This will be a very significant change to the individuals
and the lives of their communities.
Mr. WARNER. Will the Senator yield for a question?
Mr. KAINE. I yield to the Senator.
Mr. WARNER. I would ask the Senator, I know he has seen and is very
familiar with these installations and their families because of his
tenure as Governor. You may also want to make the point: in an area
such as Hampton Roads where you put these folks on furlough with
literally 88,000, 98,000 immediately affected, will the Senator speak
about the point of the ripple effect this has for literally thousands
of others who provide the support services--restaurants, gas stations,
auto repair, you name it--which rely on those folks having jobs as
well?
Mr. KAINE. Absolutely. I am pleased the Senator brought this up. When
folks are furloughed and they see their pay reduced, they will spend
less at the drycleaner and less at the restaurant. They will delay the
purchase of the automobile they planned for this year. They will be
doing all kinds of things to tighten their spending. This will affect
shopkeepers and merchants in their area.
When I was Governor, early in my term Ford decided to close a plant
in Norfolk with a couple of thousand workers. The ripple effect of that
was felt throughout the economy, a couple of thousand workers, was very
significant. To take 90,000 civilian DOD employees in a State such as
Virginia, heavily concentrated in Northern Virginia and Hampton Roads
and furlough them and reduce their salaries will be felt throughout the
economy. These civilian furloughs are one of the many effects of
sequester.
Sometimes when people hear about furloughs of Department of Defense
civilian employees, they might think it is someone sitting in an
office. Who knows what they are doing? You need to think about who
these people are. I visited Fort Belvoir Community Hospital, one of the
premier facilities in the United States which treats wounded warriors,
the people who have sacrificed so much for this Nation. When I was
dialoguing with a wounded warrior and his wife at Fort Belvoir
Community Hospital, they raised sequester. I thought they were raising
sequester about something about their veterans' benefits. No. Instead,
what they wanted to know is, My nurse is a DOD civilian and my physical
therapist is a DOD civilian. Are the people we are asking to care for
those who have borne the scars of battle--are they going to have
reduced care because of this sequester? This is who these DOD civilian
employees are, doing wonderful work, such as the nurses at Fort Belvoir
Community Hospital.
Outside of the DOD civilian space, let's move into the private sector
world. On this tour I went to the Newport News Shipyard. Senator Warner
and I were there last Saturday for a wonderful occasion honoring former
Senator John Warner. This is a shipyard we in Virginia are proud of and
proud of nationally. It is a great story. We manufacture the largest
and most sophisticated items manufactured on the planet Earth in the
Commonwealth of Virginia, nuclear aircraft carriers. They are
manufactured and refurbished in Newport News at this shipyard. It is a
very special technical expertise, the construction and refurbishing of
these aircraft carriers. They are heel-to-toe for months. Then one
leaves and the next one comes in. If you get out of line or delay,
everything becomes backed up. The result is your shipping fleet isn't
ready or as operational as it should be.
There was a pier, a drydock, filled in because the Truman was
supposed to be coming in for a new refurbishment. It was stopped and
sitting across the water in Newport. They couldn't start work because
of sequester and uncertainty about the CR.
Many other shipyards in the Hampton Roads area, private, small ship
repairs but without the financial muscle of a Huntington Ingalls of
Newport News Shipyard, have issued warn notices to lay off employees
because the Navy indicated in quarters three and four they would need
to scale back on repairs. These were some of the effects they were
seeing.
I went to a National Guard armory in Stanton, which was very
interesting. I
[[Page S2069]]
learned the National Guard in Stanton is called the Stonewall Brigade.
Their first activity on behalf of the defense of the Nation occurred 20
years before the French and Indian wars. The Stonewall Brigade in
Stanton began in 1740 defending the Nation, and they were talking to me
about sequester.
How does sequester affect the Guard in Virginia, the Stonewall
Brigade? It affects their ability to train their people. A whole series
of training exercises planned for the next months or years is now
jeopardized. They will not be able to train.
The commander of the brigade said, My people will do anything, but I
would rather have them take on the tasks and the challenge knowing they
are 100 percent trained and ready, rather than 85 or 90 percent trained
and ready. This is an important responsibility we have to those men and
women who sign up to be guardsmen in Virginia. Once again, whether it
was our DOD civilians, ship repairers, wounded warriors, or guards men
and women, you see these immediate effects sequester has in Virginia.
Of all the effects I have mentioned, I will say there was only one
which made goosebumps come up on my arm. They were all of concern to
me, but there was one which really made me stop and think. I went to
visit an ROTC unit at the University of Virginia, which combined
students from Navy, Army, and Air Force ROTC programs at UVA, to sit
with me and speak about their career path. They spoke about their love
for their country, their patriotism and willingness to sacrifice and
put themselves in harm's way for their country.
One of them basically said this: I am willing to sign up voluntarily
for a career path which will put me in harm's way--because I know it is
a dangerous world. But as I am making a decision about my career, I
hadn't really factored in the notion, Is my civilian political
leadership willing to support me? When I watch Congress
indiscriminately cutting budgets and doing an across-the-board cut to
the military of the size sequester suggests, I need to ask myself--I
will put myself in harm's ways, face bullets, danger, and the
likelihood I could be a wounded warrior and a vet in a bed at Fort
Belvoir Community Hospital once in my life. Do I want to face the risk
a Congress might impose these types of cuts which are so nonstrategic
and thereby send a signal to me what we are doing isn't that valuable?
This was chilling to me. This is the message we send, whether it be
the ship welders who could be ship repairers or go somewhere else or
bright and talented college students who could be military officers or
do something else. When we send a signal from this place, people pay
attention. If the signal we send is we have a wavering commitment and
are willing to do nonstrategic across-the-board cuts, it is not only
affecting today but it could potentially have an effect down the road.
There is an answer to this, a solution. What I heard repeatedly on
the trail from Virginians of all political parties is fix this, make a
deal, find a compromise, listen to the other side. No one said to me
fix this; fix my problem by taking more money away from someone else. I
didn't have the warriors say: Fix our defense cuts by cutting Head
Start or by cutting other priorities more.
They said go find the kind of balanced approach which would involve
cuts and savings, and we all know how to do them. This would also
involve the kinds of revenues we need to find a balance to this
problem.
The other good thing is we can fix this. In fact, we tried to fix it.
There was a bill on the floor here which replaced the first year of
these sequester cuts with a balanced mixture of revenues and
expenditures. The bill was on the floor for vote, and it received
enough to pass. It received more than 50 votes and more than a majority
of this body. This is a way of saying we do not want there to be these
nonstrategic sequester cuts. Because of the decision to filibuster, to
require it to reach not a majority but 60 votes, the will of the
majority in this body to turn off sequester for the first year and find
a balanced replacement package was thwarted. We have another
opportunity in this budget.
I will say one more thing, and then I will throw it back to the
Senator with a question. We have before us a sequester alternative in
the fiscal year 2014 budget we are debating. The budget includes a path
of deficit reduction which is balanced and is both expense cuts and
revenues. It also does something very particular with respect to
sequester. It replaces blunt across-the-board nonstrategic cuts with
targeted and strategic cuts of a lesser magnitude, because we are
adding in revenues as well. It also times the cuts so they are not
straight across-the-board equal for 10 years but a little more focused
on the back end of the 10-year period to help the economy. Signs
indicate the stock market, housing market, auto sales, and consumer
confidence is picking up.
What this budget does with the sequester is it finds savings but
reduces the deficit of savings. It makes them targeted and strategic,
rather than blunt and across the board. It times them in a way which is
more conducive to economic growth. This, as one of the many features of
this budget, is the better approach to sequester than the one we are
currently living under.
I wish to ask the Senator a question. After attending the Budget
Committee hearings with me and hearing the debate on the floor thus far
about the budget, I have to say I have been a little surprised to hear
some of my colleagues. They argue: No, we shouldn't replace sequester.
The sequester should go forward. The sequester is a good thing.
I heard this argued in committee. There was opposition to the notion
of doing something better than sequester. It was sort of expressed as
we said we were going to do the sequester cuts and we need to do them.
I have heard it said on the floor, even in the course of the debate
since yesterday. Under any circumstances, as somebody who has created
and run businesses, who ran a State government and received fiscal
accolades for doing it the right way, if we have a reasonable fix, is
there any justification for continuing with blunt across-the-board
sequester cuts which do not take into account the priority of any of
the line items and do not take into account the performance data about
whether any of those line items are affected? I would like to hear the
Senator address that question.
I know our colleague from Hawaii is also anxious to tell us about
sequester effects in her State.
Mr. WARNER. I thank the Senator from Virginia.
I ask unanimous consent to engage in colloquy with my friend, the
Senator from Virginia, the Senator from Hawaii, and the Senator from
New Hampshire as well.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. WARNER. To briefly respond--I don't want to keep returning to the
``Blazing Saddles'' analogy, other than the fact these cuts were set up
to be the stupidest way possible. No rational group of folks would
allow them to come to pass.
The only other point I wish to make is with regard to the Senator's
point about the ROTC individuals. I think at times this may not have
been part of debate--although there may have been a number of
colleagues on the other side of the aisle who have argued strongly
against sequester and pointed this out as well. We are not just talking
about the immediate short-term effect on that furloughed employee or
the ship which may not get repaired. As these cuts were set up to be so
ridiculously put forward, the effects of these cuts will actually, in
many cases, cost us more money than the savings.
If that ROTC member who has taken 3 years of ROTC decides to quit and
not become an officer, the money we have invested in his or her
training up to that point is flushed down the toilet.
If we do not make the ship repairs that are part of our industrial
base and if the workers at those ship repair businesses in Hampton
Roads and in Hawaii and in New Hampshire and in California and in
Alabama and in Mississippi leave those careers and those welders go
elsewhere, the cost of replacing that workforce and retraining them
because we have said, oops, we made a mistake and we come back and fix
it 2 years from now, will end up costing the taxpayer more than the
dollars we have saved.
If we continue to defer the maintenance and the training of our Armed
Forces so we don't have divisions ready to go into action, the cost to
get them
[[Page S2070]]
back up to military readiness will be exponentially higher the longer
we wait than doing these cuts in a smarter, more tailored and more
phased-in fashion.
I think the military and everybody I have seen realizes they are
going to have to make the kind of cuts to make sure that everything--
domestic discretionary, defense, entitlement reform, and revenues--all
have to be part of the mix.
Our military does a remarkable job for us, and we owe them not only
the kind of platitudes we sometimes say on this floor, but we owe them
an ability to manage a budget that is reasonable, that is thoughtful,
that does not have this kind of arbitrary, across-the-board-regardless-
of-performance cut. We owe that young man or woman who is in the ROTC
the commitment that our Nation will stand by their obligations to their
training and support of them so they can continue to serve and protect
our Nation.
I now want to ask our friend, another new Senator, the Senator from
Hawaii, for her comments. Hawaii is a State that has enormous military
assets as well as other assets on the frontline of our Nation's shift
in focus on Asia. She may want to add as well any particular stories
about her views on sequester and how our budget takes a more reasoned
and balanced approach.
The Senator from Hawaii.
Ms. HIRONO. I thank the Senator and good morning, Mr. President.
The ACTING PRESIDENT pro tempore. Good morning.
The Senator from Hawaii.
Ms. HIRONO. I wish to thank Senator Warner for leading this colloquy,
and I am glad to join him and my friend Senator Kaine in talking about
the effects of sequester and how we need to come up with an alternative
to the sequester.
Senator Warner used the word ``stupid'' to describe sequester, and I
think that is apt, because what family, in trying to get a handle on
their budget, would just make an across-the-board cut to everything in
their family's budget. The Senator raised the analogy that no business
would do an across-the-board cut, but let's talk about families in our
country. No family would cut across the board their food budget, their
rent budget. That would not happen. So why are we doing this?
As one of the people who testified before the Armed Services
Committee said, sequester was the result of political dysfunction. That
is very true because it was never supposed to happen. As Senator Kaine
said, I am very surprised to listen to our friends on the other side of
the aisle talk about sequester--something that was never supposed to
happen, and both Republicans and Democrats had agreed this was not
going to happen--now take the position that we are where we are and we
need to live by the boundaries of sequester.
What sequester does is it interjects huge uncertainty into our
economy, huge uncertainty, at a time when we are still digging out from
the worst economic crisis since the Great Depression. Senator Warner
and Senator Kaine have both acknowledged that Virginia is ground zero
on the bad effects of sequester. If Virginia is ground zero, I would
say Hawaii is ground 0.1. We have a huge military presence in Hawaii.
They are a big part of our economy. In fact, there are some 101,000
people in Hawaii who are directly employed with the military. That is
16 percent of our workforce. Some 20,000 of them have gotten notices of
furloughs, looking toward a reduction in their pay of 20 percent. Talk
about the ripple effect of that kind of reduction in their ability to
buy products, we can see what the negative ripple effect would be.
In Hawaii, as I said, the military is such a big part of our economy.
States such as Hawaii, such as Virginia are among the first States to
experience the negative effects of sequester--immediate. Thousands of
letters have been going out to say: Expect to be furloughed, with
11,000 people possibly losing their jobs directly. These are immediate
impacts.
The top reason we need to replace the sequester with something
balanced, reasonable, fair, and not stupid is that sequester cuts jobs.
There will be huge job losses, and economists of all stripes have said
don't keep going down this path with these kinds of cuts that will
severely hamper economic growth and cost jobs in this country. These
are senseless cuts.
The State of Hawaii is already reeling from the potential impacts of
sequester which will begin in a couple weeks. We have already gotten
many of these notices. But the sequester also represents huge cuts to
education, housing assistance, and other programs that are on the
chopping block. We must listen to our constituents. So many of them, I
know, have contacted all of us. There was one letter I received from an
elderly woman and her husband. She lives on Social Security and on HUD
housing grants--HUD vouchers--and she said: Our Social Security checks
are so small.
Yes, while sequester doesn't touch Social Security, it certainly has
a potential impact of cutting their housing vouchers.
She said: I don't know where we would go if we lost our HUD housing
voucher. We would be homeless. I am so distressed, she wrote to me.
Another letter I received was from an Army reservist who was all set
to go for his training. Now multiply this situation thousands and
thousands of times across our country. He said due to sequester he will
no longer be traveling to the TDY location for his training. Yet he
planned his calendar based on his going. The letter he got was that his
orders had been canceled for training due to sequester and his billet
is going unfulfilled to cut costs.
Failing to provide training to this young man and the thousands and
thousands of other men and women who are in our Reserves degrades our
Nation's readiness.
I received letters from people who work at the Pearl Harbor shipyard,
which is the largest industrial employer in the State of Hawaii, with
some 5,000 direct employees, both civilian and military, who got their
furlough notices. These are highly skilled people with good-paying
jobs. When they think about a 20-percent reduction in their salaries,
believe me, they are thinking about how to revise their family budgets,
and that revision is not going to involve across-the-board ``stupid''
cuts.
These are just some of the examples of how sequester will hurt a
State such as Hawaii. What should we do to replace sequester? My
colleagues have talked about it. The American people understand this
meat-ax approach to balancing our budget is the wrong way to go because
it destroys jobs and it affects many people who are working right now.
So the budget put forth by Chairman Murray will reverse this path down
no man's land, basically. What the Murray budget says is let's provide
a balanced approach. Let's ask a little more from the most fortunate
and wealthy, including the corporations, while including more smart,
targeted cuts to other areas of our budget.
Let's remember once again that we have already implemented and put in
place $2.4 trillion in deficit reduction. So by following the balanced
approach that is represented in the Murray budget, we will have reduced
the deficit by some $4 trillion over the next 10 years.
As I said, we need to do this in a responsible, balanced way, and it
bears repeating--because we are still hearing from our friends on the
other side that sequester is what we have; let's just live with it--
that there is an alternative, friends. The alternative is a fair,
balanced, smart way to deal with our budget deficit, to create jobs,
and to help our families, because our budgets do reflect our values,
and our values are about supporting our families, creating jobs, moving
our country forward, and enabling us to continue to dig out from the
worst economic crisis since the Great Depression.
I thank Senator Warner very much for this opportunity to come
forward, and I will have a few more things to say perhaps later on
about the budget and how Senator Murray's budget reflects the kind of
values we should be putting forth in our country.
Mr. WARNER. I wish to thank the Senator from Hawaii for the real
stories of how these sequester cuts are affecting folks in her State of
Hawaii, and, obviously, my friend, the Senator from Virginia, has
expressed those challenges as well.
Let me be clear. It is not that our budget proposal doesn't make
significant cuts in defense. We still add roughly $250 billion of cuts
in defense over a 10-year period, but we do it in a smarter, targeted,
phased-in way.
[[Page S2071]]
The last point I wish to make, before I ask my friend, the Senator
from Virginia, to close out, is I want to agree with so many of my
Republican colleagues who have come and pointed out this is a
responsibility we owe to our children and our grandchildren. We,
candidly, owe it to ourselves. This $16.5 trillion in debt goes up $3
billion a day, and it is unsustainable. As Erskine Bowles once said: It
is the most predictable crisis in our lifetimes if we don't grapple
with it. And so we need a growth agenda.
Two comments I would simply make in closing: If we look back at
recent American history for the period of the highest economic growth,
the period that we added the most jobs, the area where America
continued to lead in innovation, it was during the 1990s. We had a Tax
Code at that point that generated sufficient revenue to meet our needs
without dramatic expansion of government. I think, in retrospect, most
of us would acknowledge we probably made a mistake when we took $4.5
trillion out of the revenue stream in some of those cuts that were made
earlier.
We have a spending issue, but we also have a revenue issue. What this
Democratic plan puts forward doesn't say we have to put all those
revenues back. It doesn't say we have to put half those revenues back.
What the Democratic plan says, to get us back on this path to balance,
to get us back on this path to growth, we have to, roughly, return
about one-third of that $4.5 trillion. With what we did on New Year's
Eve and what this budget does, it replaces $1.575 trillion into the
revenue stream. It doesn't bring us back to the 1990s rate, but I would
love the chance to debate my colleagues on how that is not a reasonable
assumption.
If we have a structural deficit problem on the spending side, we also
have a structural deficit problem on the revenue side, and I believe
this approach is reasonable and both fiscally prudent and responsible.
I would simply close as well with saying that we can't tax and cut
our way out of this problem. We have to have a growth agenda. Any good
company--any good country--has a business plan. Any business plan for
any good company--any good country--that is going to compete in the
21st century has to do at least three things: They have to invest in
their workforce, invest in their infrastructure, and they have to stay
ahead of their competition, which means research and development.
I tell my colleagues, there is no way a plan that says America will
invest less than 5 percent of its public revenues in its education,
infrastructure, and R&D will keep America the leading economic power in
the 21st century. If we want to honor our commitment to our children,
we have to leave them not only a nation that is not riddled with debt
and deficit but also a nation that continues to be the economic leader
in the world. I believe our plan makes and protects those investments
in those key components of growth.
I hope, over the coming hours, we will go through this debate--I know
we will have a spirited period of a lot of amendments--that this budget
will pass, and it will then find agreement with our colleagues in the
House.
I want to again commend both the chair and the ranking member in that
at the end of the day, we have to find common agreement to get this
done. This issue that hovers over all of our other debates has in many
ways become a metaphor of whether our institutions can function in the
21st century. So just as the chair and the ranking member found
agreement through a markup process where both sides were heard and
amendments were offered and debated in a fair and open process, I want
to thank both the chair and the ranking member for their commitment.
They have different ideas about how we get there, but at the end of the
day we do have to get there in common agreement.
Mr. President, I want to give the Senator from Virginia the last word
on this issue. So I yield the remainder of my time to the Senator from
Virginia.
Mr. KAINE. Mr. President, I thank my colleague Senator Warner.
I do want to pick up on one of the last points he made, which is the
balanced way of getting to where we all want to go. We want to have a
growing economy with a lowering unemployment rate. We want to deal with
our deficit. These are challenging, complex goals that are not easy,
but we can get there. Even the action of this body last night in
passing the fiscal year 2013 appropriations bill and fix shows we can
cooperate together and with the House get there. It is my hope that
will inspire us going forward.
The question is this: All agree that what has been done thus far in
the area of deficit reduction equates to about $2.4 trillion of deficit
reduction that has been done by the last Congress, including the deal
on the Bush tax cuts that were made at yearend, $2.4 trillion of
deficit reduction over the next 10 years. And all in looking at that
deficit reduction also agree that $1.85 trillion of the deficit
reduction was cutting expenses and a little bit more than $600 billion
of it was revenues that were achieved through the yearend Bush tax cuts
deal. So overwhelmingly what has been done thus far has been in
spending cuts rather than new revenues. It is very important for us to
know that. It is very important for folks to realize that Democrats are
willing to make hard calls about spending, and we have done it already.
But the question before this body and the question before the House
now is, going forward, what do we do to achieve additional deficit
reduction that is consistent with having a growing economy? The
approaches of the Senate and the House on this could not be more
different.
The House approach basically says all additional deficit reduction
should be achieved by cutting spending, by looking at one side of the
balance sheet. I do not know of a business, I do not know of a family,
I do not know of other units of government that, as they are trying to
wrestle with this question, confine themselves only looking at one side
of the balance sheet. But that is what the House budget does.
I was thinking about this approach and this question about deficits
not long ago, and it struck me that when I look at myself in a mirror,
I always wish I was thinner, but I have never once looked in a mirror
and wished I was weaker. An all-cuts approach is like looking in a
mirror and wishing you were weaker because an all-cuts approach makes
you weaker. It makes you weaker in defense, it makes you weaker in
education, it makes you weaker in infrastructure.
By laying people off in jobs, it makes you weaker because your
unemployment rate is higher. An all-cuts approach is like looking in
the mirror and wishing you were weaker.
I don't want to be weaker. I don't want this Nation to be weaker. We
have to be stronger. Can we make cuts? Sure, we can. We have, and we
will make more. But we ought to be focused on being stronger, about
growing the economy and growing jobs.
That is why the approach the Senate takes is the right approach;
because by utilizing revenues appropriately, reforming tax expenditures
to reduce them on the equivalent of about 7 or 8 percent a year, these
myriad of tax expenditures in the Tax Code, we are able to find
investments in infrastructure and soften the indiscriminate cuts that
are leading to the job losses that my friend from Hawaii described.
The Senate budget, in achieving additional deficit reduction, is a
balanced approach that will make us stronger, not weaker. That is why
it is my great hope that we will pass this in a significant way.
The PRESIDING OFFICER (Ms. Baldwin). The Senator from Washington.
Mrs. MURRAY. Madam President, I thank the Senators from Virginia and
Hawaii for excellent statements and laying out the framework of why it
is so important that we have a progrowth bill that is balanced, that
deals with both spending cuts and revenue, and I really appreciate
their time both in committee and on the Senate floor.
I ask unanimous consent that at 3:45 p.m. today there be up to 60
minutes of debate, equally divided between Senators Klobuchar and
Coats, or their designees, for a report on the economic goals and
policy under section 305(b) of the Congressional Budget Act.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SESSIONS. Madam President, I have enjoyed listening to our
colleagues discuss the issues, particularly
[[Page S2072]]
the sequester. I know Senator Kaine and I talked about this previously.
I would just like to make a few points that are so important for every
Member of this body to understand.
Senator Kaine just said additional deficit reduction is needed. He is
exactly correct. But this budget has no additional deficit reduction.
They claim they have a balanced approach. They have used that word
now 40-some-odd times, ``balance.'' This budget never balances. It does
not balance in 10 years, 15 years, and has no vision that would even
lead to balance. It remains unsustainable in terms of adding to the
debt every single year, resulting in a 1-year interest payment in 2023
of $800 billion--well more than the defense budget; surging interest
from around $250 billion now to $800 billion a year--forever, I
suppose. And it would go up with the debt rising and with interest
rates that could rise even more.
So we don't have additional deficit reduction in the budget that we
are being asked to vote on. Senator Kaine said can we make cuts? Yes.
Well, I would say we can make more cuts, but we don't. Yes, there is
some reduction in some programs, but, on net, no deficit reduction in
the budget. So it doesn't change the debt course. You can't deny that.
What we are saying is, go back to the committee. Write the budget
like you want. If you think there ought to be more taxes than I think,
that is OK. Bring it up. Let's vote on it. But let's have this budget
do what you say, be balanced. They have used this word ``balance''--
balance, balance, balance--40 more times. We have been keeping up with
it. It is so ridiculous. It is utterly unbalanced. It never balances.
By their own admission, the deficits in 1 year are never lower than
$400 billion. So it never balances.
A balanced approach. A balanced plan. Why? Are they guilty of
confusing the issue? Do they think the American people will hear their
message and think, oh, they have a balanced budget? I suspect that is
what they think. Twice I have observed my Democratic colleagues at the
committee slip and say they have a balanced budget. They have this in
their heads so much, but a balanced plan is what they are really
saying.
So what is a balanced plan? The way it has been promoted: $1 trillion
in tax increases, $1 trillion in spending cuts, a net $2 trillion in
deficit reduction. Not so. It is not so. The tax increases are offset
by spending increases.
That is just the way it is. You can spin it any way you want to, but
I want to make that point.
One thing I will share about the sequester--and I am so pleased that
Senator Rubio is here, and I look forward to yielding to him. I truly
think this is an unwise mechanism to reduce spending. It should not
happen. It should be fixed.
I totally agree with my colleagues that this is unfairly and
disproportionately falling on the military. I know Senator Rubio has
military bases in Florida. I have them in Alabama and they have them in
Virginia, we almost all do. These are patriotic Americans, and these
furloughs are in effect 1 day a week, a 20-percent pay cut out of the
blue. It is not necessary, and there are other things that have
happened.
So how did it happen? Well, it was proposed by the White House, who
said: OK, if this special committee doesn't reach agreement on the
details of spending cuts, then we will have a sequester across the
board. So it originated from the White House. The political theater we
have down here is not correct, and we need to be honest about this.
The Republicans agreed to it. It was part of the Budget Control Act.
That is the legislation. And who signed the legislation in blue ink
right on the back? The President of the United States, Barack Obama.
So he signed it, it is his document, and we agreed to raise the debt
ceiling $2.1 trillion, and we agreed to reduce spending over 10 years
by $2.1 trillion.
Before the ink was dry, the President was proposing to eliminate the
cuts he agreed to. He has been fighting to eliminate those cuts from
the beginning, and they are not really cuts. If they were properly
applied, it would reduce the growth of spending and not cut spending at
all.
So the committee that was supposed to find other cuts failed. The
sequester went into effect. And it is an antimilitary provision. It was
designed by Jack Lew, a very liberal member of the President's Cabinet,
who was the Director of the Office of Management and Budget at the
time.
The President, in my opinion, seemed to be quite happy to see these
cuts fall on the Defense Department. He seemed to be happy to have this
happen.
Why do I say that? Because he has done nothing to fix it except
demand something that he has no right to demand, and that is to violate
this agreement to reduce spending and instead raise taxes and spend
more. That is not going to happen. Congress is not going to vote to
violate the agreement they made with the American people less than 2
years ago. If we give in on that, we might as well quit.
Our colleagues say they want to have a balanced approach to this
budget, and they are going to raise taxes. Most people who hear that
think the taxes would be used to reduce the deficit, but they are not.
The taxes are going to be used to fund more spending over the agreement
we have had in place now for about 20 months under the Budget Control
Act. They want to increase spending above these levels, and they want
to use all the new tax increases they are now proposing to fund it.
It does not change the debt course of America, which Mr. Elmendorf,
the CBO Director, told us in committee is an unsustainable path that we
are on even after the Budget Control Act was passed in August 2011. So
we need to work on it.
I am prepared to offer solutions. The House of Representatives has
twice passed legislation that would alter the Budget Control Act so
that the cuts don't fall so hard on defense. In fact, they eliminated
the additional defense cuts, the second phase of defense cuts, and
found cuts elsewhere in the budget and smoothed it out fairly. That is
what should happen, and that is where we need to be.
So I would encourage all our citizens, all our Members of Congress,
all our military leaders by saying if you want to fix the sequester
then address your request to 1600 Pennsylvania Avenue. Address your
request to the Commander in Chief of the U.S. military, who has an
absolute duty--a responsibility--to ensure that these reductions are
done in a fair way.
We have voted and fought for flexibility on this side of the aisle,
and we believe in finding, and will vote for, other reductions in
spending to prevent this happening the way it is set to occur under
current law.
It seems to me they wanted it to happen this way, so they could come
to the floor and make a point somehow that we are dramatically and
disastrously hammering the budget, when it is not necessary for it to
be done this way. That is the way I see it, and I believe we can reach
agreement on this. I think somehow we will because it is not right the
way the military--representing one-sixth of all Federal spending--is
taking half of the cuts. That is the way it falls right now. It is not
right and it is too damaging.
It is great to see Senator Rubio. I believe he is next up. I yield to
him and thank him for his contribution to our discussion.
Madam President, I ask that time be counted against the resolution.
The PRESIDING OFFICER. The Senator from Florida.
Mr. RUBIO. Madam President, I thank Senator Sessions for enlightening
us on this budget as he has been doing all day on the Senate floor.
I want to give some perspective about what we are debating. I think
sometimes those of us who work in this building come to believe that
Washington, DC, and government is the center of the universe or even
the center of peoples' lives, and it is not. All this stuff we are
talking about on the Senate floor, not just this day but every day, the
reason it is relevant is how it impacts the lives of real people all
over this country. What impact does this have on peoples' lives?
Ultimately, I know it is cliche-ish to say this, but it happens to be
very true that we are sent here to work for people. We are sent here to
work for the people who elected us from the States we come from. So all
this stuff we are discussing is relevant to the extent that it impacts
the lives of real people in our country and in some respects around the
world.
[[Page S2073]]
When you talk about cutting spending, what matters is the spending
you are cutting and how it is impacting real people, for better or
worse. When you talk about raising taxes, those taxes have to be paid
by somebody. They are not being paid by some anonymous thing. They are
being paid by a person or a business, which is a collection of people.
The point is these taxes are being paid.
Talk about the debt. The debt is not simply just a moral financial
obligation. The debt also has to be paid. Someone is going to pay that
debt one day. Every penny this government borrows someone is going to
have to pay back one day. They are going to have to pay it back through
higher taxes. If the debt is too high they are also going to have to
pay it back through less opportunities. That is why this matters and
why it is relevant. It is relevant because we have to view it through
the lens of peoples' real lives, the lives of real people in the real
world.
What do people want out of their lives? It is not that complicated.
It is what all of us want. They want a job that pays them enough money
so they can have a good standard of living, so they can afford to maybe
buy a house and have enough time to spend with their families and have
leisure activities, maybe take a vacation every year or so. People want
that. People want to be able to pursue their dreams. Maybe you have a
great idea about a new business you want to start and you want to live
in a country where if that is what you want to do with your life, it is
actually possible; you can actually do something that you love for a
living and they pay you for it.
What everybody wants, no matter where you are in the economic strata,
everyone wants to make sure their kids are better off than themselves.
That is not unique to Americans. People all over the world want their
kids to be better off than they were.
That is what this is about. It is about what role can we play making
all these things more possible in this country. The fact that this has
been more possible here than anywhere else is what has made us special.
So in order to understand what we can do to make that possible we have
to understand what makes that happen. How does prosperity happen? How
does the kind of prosperity we Americans want for ourselves and our
families, for our children, how is that possible? That is also not that
complicated. It is largely a function of the private economy, and it is
a cycle that is very well understood.
Someone has a good idea for a business, a new business, or growing
their existing business. They somehow get access to money, whether it
is their own money or money they borrowed or someone invests through
them, and they open this business. There is no guarantee that business
is going to work out, but they are willing to risk it. And the idea
works. All of a sudden this business they started all by themselves out
of the spare bedroom of their home now has five employees--and five
employees is not just a number, that is five families who are taking
home a paycheck. Those are five providers, mothers or fathers, who are
bringing home opportunities to their children.
This is how prosperity is created. This is how every one of us has
ever gotten a job or how our parents got their jobs. It is because he
or someone else risked it and created a business opportunity that
provided them a job. This is how prosperity is created.
When you view prosperity this way you come to understand that what we
need to do here is to make it easier for that to happen and not harder.
Government does have an important role to play in our society. It does.
For example, we believe in a safety net, not as a way of life but to
help those who cannot help themselves. We are a society that is too
prosperous and, quite frankly, as well as that, we are too humane and
too compassionate to not take care of those who cannot help themselves.
We always have and we always will. We also need to have a safety net to
help those who have failed to get back on their feet and try again. But
the safety net was never designed to be a way of life.
By the same token we need to have security. Government plays an
important role in our security--our national security for sure, but
also in combating crime and enforcing contracts and ensuring that the
water we drink is clean, the air we breathe is safe. These are
important roles for government to play. But the majority of the things
that are going to impact prosperity creation in this country do not
come from government. They come from the private sector, and the job of
our government is to make it easier for that cycle of prosperity I
described to happen.
The job of our government is to create an environment where people
are encouraged to and it is easier for them to risk the money they have
access to in order to start a new business or grow an existing business
so they can hire more people and create more jobs for others. There are
a lot of things government can do to help create that environment, but
there are a few that are being discussed. I want to point to three.
The first is predictability. What do I mean by that? What I mean is
when someone decides they are going to open a business, one of the
things that encourages them to hire people is they know what tomorrow
is going to look like. They know what the taxes are going to be, they
know what the law is going to be, what the economy is going to look
like, so they feel encouraged because they can plan and know
what tomorrow is going to look like.
Imagine for a moment you are a businessman or businesswoman and you
are deciding whether to hire five people next year. One of the first
things you want to know is, Am I going to have customers to pay their
salaries? How much am I going to owe on taxes and insurance? You want
predictability and that is something that has not happened from
Washington. There has not been a budget over the last 4 years out of
this Chamber, and that creates unpredictability.
I am pleased there is a budget to debate; it is an important debate.
Even though we do not agree on everything, I congratulate those who
have prepared this budget on bringing it up for a vote on the Senate
floor so we can have this debate, a vibrant debate. But part of the
problem we have is this budget that is offered doesn't really address
the debt. Why does the debt matter?
The debt matters. It matters as a moral obligation for sure. It is
wrong to hit future Americans and our young people with this kind of
debt, but it is having an impact right now. The debt is not something
that is hurting us 20 years down the road or 10 years down the road
alone, it is hurting us today. The problem is when people look at this
economy and they look at this debt and they say there is no plan in
place to fix it, there is no serious plan in place to deal with it,
they are worried about risking their money and creating jobs in
America.
They believe unless this debt is solved, we are going to have a
financial crisis in this country. They believe unless this debt is
solved, we are going to have dramatic increases in taxes, which is not
going to make America a good place to do business. So there are jobs
that are not being created right now because of the fear over the debt
and no plan to fix it. This budget does not fix it. This budget does
not fix it.
The first thing we need from government is to create an environment
where private business can grow and create opportunity, which is
predictability. This budget does not do that. The second thing is
affordability. We all understand we have to pay taxes. How are you
going to pay firefighters and police officers? How do we pay the men
and women who defend our freedoms around the world? How are the lights
on in this building? Of course we have to pay taxes. This is not about
paying taxes or not paying taxes. This is about the fact that there is
only so much money in the world. Every penny the government takes in in
taxes is money that is not available to invest in a private business.
Every time you take a tax, what you are doing is taking money out of
the economy. You have to do that at some point because you need a
government, but if you do too much of it then there is not enough money
for people to spend at your business. If someone is paying more in
taxes, that means they have less money to spend where you work, which
means you are going to make less money in tips or in salary or it may
even cost you your job if the taxes are too high.
I tell you, we focus on Federal taxes here, but these are not the
only taxes
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people pay. Depending on where you live you are paying local and State
and now Federal taxes. You add this up and there are people in this
country paying close to half the money they make in taxes. How is that
good for growing your economy?
So that is a problem.
This budget talks about raising taxes. It doesn't say how. That is
one of the things I wanted to address because I am telling you right
now, you can raise taxes 100 percent on the richest people in America,
and you will not solve this debt problem. Some statistics say if you
raise taxes 100 percent on millionaires it will pay for about 60 days'
worth of government. What are you going to do for the other 305 or 304
days of the year? That is a problem. What happens when you run out of
rich people to raise taxes on--or so-called rich people? You have to
raise taxes on people who are not rich, and you have to raise taxes on
the middle class.
That is why I am going to offer two amendments to this budget that I
hope will pass. The first amendment says we are not going to get rid of
the mortgage interest deduction to pay for new spending and new
programs in government. If you want to talk about the mortgage interest
deduction in the context of tax reform--I am not sure that is the best
idea or bad idea. Let's have that debate. But if you want to talk about
it in the context of we are going to take that money and use it in the
context of lets grow government, we are going to have a problem because
there are middle-class people in this country who already have it hard
enough as it is. They are working twice as hard, and they are making
half as much. They have paid their mortgage on time every month even
though they are upside-down, but because they paid on time, now their
bank will not finance them and they are stuck and they are upset and
they have a right to be.
Now on top of that you are going to get rid of that mortgage interest
deduction? I am not claiming that is what is being offered. I am just
saying if no one is going to offer that, let's prevent that now. I am
offering an amendment that is going to prevent that.
Here is another thing. We should not raise taxes on the middle class
at all to pay for new government, and I will offer an amendment that
prohibits that as well. So the second thing we need is affordability.
No one is saying we don't need to fund government. Of course we do.
By the way, the best way to fund government is to grow your economy.
If we could grow this economy at 4 percent a year for this decade, that
would generate about $3, $3.5 trillion in new revenue. There is no tax
increase in the world that can do that, at least no realistic one.
My last point on this is one of the things government can do is help
people to help themselves. In the modern era there is nothing more
important in that regard than education. The world has changed. When my
parents came here in 1956 from Cuba, they did not have a lot of skills.
My dad didn't really go to school. My mom didn't either. And they were
able to achieve a middle-class lifestyle in this country as a bartender
and a maid. That is almost impossible to do today. That is no one's
fault; that is just the way the world has changed.
Today you need a certain level of skill because the information
technology age has changed everything. The good news is the jobs that
are being created, these new middle-class jobs have a lot more
opportunity for better pay. The bad news is we have a lot of people who
do not have the skills for those jobs.
We have a skills gap in America that needs to be closed, but the one
I want to focus on is school choice. I think it is wrong that the only
parents in America who cannot send their kids to the school they want
are poor parents. I think that is fundamentally wrong. Middle-class
parents can sacrifice and scrape and some of them--not all of them but
some of them--can afford to send their kids to the school of their
choice. Rich people can send their kids to any school they want, but
poor parents in America are stuck.
Envision this for a moment. Envision this for a moment. You are a
poor single mom or single dad. You are living already in a dangerous
neighborhood in substandard housing, and on top of that you are forced
by the government to send your children to a school that is failing and
every year the politicians tell you they are going to improve these
schools. They say: Give us a chance to pour more money in these
schools. We are going to turn them around.
I hope they do. But in the meantime, while they are carrying out this
experiment your kids are turning 5 and 6 or 7 or 8, and the clock is
running and you can never have those years back. It is wrong. It is
wrong that parents who do not have access to funds cannot send their
kids to the school of their choice.
One of the things I want to try to do at the Federal level is
replicate what we have done in Florida; that is, create an incentive
for people to donate their money to private not-for-profit scholarship
organizations that give scholarships to low-income families so they can
send their kids to their parents' choice, not just to the school of the
government's choice. That is important in terms of helping people
acquire the skills they need in this new century because if we do not
close that skills gap, we are going to have a huge opportunity gap in
America, one that is already developing.
I hope we do not underestimate what is happening out there. We have
working class people in America who are starting to wonder if this is
still the place where if you work hard you can go as far as your talent
will take you. They are starting to wonder if this is still the place
where if you work hard, you can leave your children better off than
yourselves. You have middle-class families who are starting to wonder
who is fighting for them. The people who have made it--big companies,
big corporations--have lobbyists all over this building standing up for
them. They don't want to take anything away from the people who have
made it. They see other people always arguing on behalf of government
programs to help people who are struggling. Many of those programs are
important. They don't want to take that away from them either. But who
is fighting for them? Who is fighting for the people who have done it
the right way, who did not take out mortgages they couldn't afford, who
will take a job even if it pays half as much and requires them to work
twice as long because they do not want to be dependent on government?
Their pride will not allow it.
Who is fighting for them? And they are worried about the future. What
about the people with the big ideas, the ones who are going to start
the next American company? They are starting to wonder whether America
is the place to do it when they hear some people basically describe
financial success as wrong. They start to wonder whether government is
an obstacle or ally in their hopes of opening their business here. This
is a fundamental problem for us. This is not an economic debate; this
is a debate about our identity as a country.
It is important for us to understand what makes America different
from the rest of the world--and we are different. For those people who
were born and raised in this country, as I was, it is easy to take this
for granted. We should not. It is not like this everywhere. In most
countries, a person can only do what their parents did for a living--
even today. In most places on Earth, children can only go as far as
their family went--even today. This Chamber is full of people--and I am
glad to be a part of it--who have gone further than their parents ever
did.
If people in this Chamber had grown up in the Old World, they would
not be here, nor would they be able to run a business. In the Old
World, people were trapped doing what their parents did. What makes us
special and different is that it doesn't matter what our parents do for
a living. It doesn't matter if we are not well connected or famous. We
can go as far as our talent or work will take us. If we lose that, we
will lose what makes us special and different. That is what we should
be fighting about, and in some ways we are.
I think we actually do have an agreement here. The agreement is that
the only solution to our problem is growing our economy. We cannot tax
our way out of this problem. We cannot cut our way out of this problem
either. The only solution to this problem is to grow our way out of
this problem, and I think we agree on that.
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I hope the debate we are going to have is, how do we grow our way out
of this? How do we create growth in the private economy? Do we allow
government to spend as much as it wants until growth starts to happen?
That is what one side is arguing. We have to ask questions, such as, do
we embrace the principles of free enterprise and say: Look, government
has a role, but it has to be limited. What we have to do is create an
environment for the private economy to be incentivized to grow, and it
will happen.
I want to have that debate. I want this budget to be that debate.
By the way, no one comes to this with clean hands. I will criticize
my own party on this. No one can build up $16.5 trillion by themselves.
This is a bipartisan debt. We have never seen anything like the last 4
years, I will say that. I have never seen anything like the last 4
years in terms of growing the debt. There are Republicans who are
complicit in this debt issue as well. We should be honest about that.
We should also be honest that at times some in my own party have
focused so much on the trees of debt that we lost focus on the forest
of growth.
The reason we should care about the debt is because it hurts growing
our economy, and that is what the debate should be about. It should be
about growth. Let's have a debate here about how we can get our economy
growing at least 4 to 4.5 percent a year so we can pull millions of
people out of poverty, pay down and stabilize our debt, and get people
from the working class to the middle class and from the middle class
and beyond. Let's have that debate. Let's argue about what is the best
way to create growth. Do we create growth through more government or
more free enterprise? Let's have that debate.
For those on my side of the argument, I hope we can have that debate
because I like our chances. I like what history has to say about it. I
think we can prove that the only nations in the history of the world
that have ever accomplished the kind of economic exceptionalism and
middle-class prosperity that Americans want and expect and deserve are
the countries that have followed the path of limited government,
effective government, well-run government, and free enterprise. Our
country deserves once and for all to have that debate and stop hiding
behind negotiations that it is rich versus poor or the haves versus the
have-nots.
Let's have a debate about growth. If we grow this economy, we can
protect America, and it will make the world a better place as well.
I yield the floor.
The PRESIDING OFFICER. The Senator from Pennsylvania.
Mr. TOOMEY. Madam President, I yield such time as I may consume from
the resolution.
The PRESIDING OFFICER. The Senator is recognized.
Mr. TOOMEY. Madam President, I wish to commend the Senator from
Florida. I could not agree more with the importance of focusing on
economic growth and developing policies that maximize economic growth.
I believe we could have a tremendous economic recovery underway right
now, but we don't. The main reason we don't is because we have a
dysfunctional government in Washington that has policies that are
preventing economic growth.
Unfortunately, the budget resolution our Democratic friends have
offered offers more of the same failed policies that would only result
in extending this period of miserable economic growth or a lack
thereof. I would like to talk about a few aspects of this. I will talk
about what they want to do on taxes, but before we get into the
substance of the Democratic budget proposal for taxes, I think a little
historical context is important, and we don't have to go back to
ancient history.
In the last few years, what our Democratic friends and this
administration have done is repeatedly raise taxes on all Americans,
including middle-income Americans, and they propose much more now.
Let's go back, for instance, to the ObamaCare middle-income tax
increases. I will run through a quick litany of some of the tax
increases we have suffered through as a result of ObamaCare, which
raises taxes on people with health savings accounts and flexibility
spending accounts. It raises taxes on people with catastrophic medical
expenses. It raises taxes on people who purchase medical devices. It
raises taxes on people who buy health insurance. It raises taxes on
people who don't buy health insurance. It raises taxes on employers who
cannot afford to provide health insurance. It raises taxes on people
who have family plans that Washington believes are excessive. Is there
anyone in America who is not on one or more elements of this list? I
very much doubt it. The fact is that ObamaCare was a huge tax increase
that added up to $1.2 trillion over 10 years, and it very much included
all kinds of taxes that will be carried by middle-income Americans.
More recently, on January 1 of this year, we had another huge tax
increase. That was about $620 billion over the next 10 years. It was
less than 3 months ago. This raises the top rate from 35 percent to
42.5 effectively when we include the phasing out of deductions. If we
add in the Medicare increases and the total top Federal marginal tax
rate, it is 44.8 percent.
By the way, this is the highest this rate has ever been. Right now,
this is the highest this rate has been since Ronald Reagan inherited a
disastrous tax code from Jimmy Carter. That was a long time ago. That
doesn't include the State and local taxes, which put many Americans at
a top marginal tax rate of over 50 percent. The government is taking
over half of the income they are earning, and our friends who are
introducing this budget are suggesting that all of this is not enough.
They are suggesting that we need yet another big tax increase--in fact,
we need a giant one, $1.5 trillion over the next 10 years in new
additional taxes.
I have news for everyone. I don't see how this can possibly be done
without significant tax increases on middle-income Americans. I know
some folks in this Chamber like to suggest this can be done by soaking
the rich again. We can just go back to soaking rich folks again. I
don't see how that can work. I will give an example of why I don't
think that can work.
The President laid out in his budget last year his plan for a whole
new round of taxes for wealthy Americans on top of the tax increases
that occurred weeks ago. He specified how he would propose doing it.
The gist is that he wants to limit the value of deductions and apply
taxes to income that is not otherwise taxed at the moment. He will
limit the value of all kinds of deductions. He laid this out. It would
be all itemized deductions--mortgage interest deductions, charitable
contributions, State and local taxes. They want to tax health insurance
exclusions and employee contributions to 401(k)s and IRA plans, section
199 manufacturing deductions, tax exempt interest, contributions to
health savings accounts.
All of these things would be limited and would especially affect the
wealthy taxpayers under the President's plan--the last budget we got
from this President. He has chosen not to comply with the rules whereby
he should have already produced one for this year. These tax increases
were meant to be in that budget above and beyond the tax increase he
got on January 1. Guess what. The President's plan for raising taxes on
the wealthy is $584 billion. That is a lot of money, but it doesn't get
us anywhere near the $1.5 trillion this budget resolution calls for.
The President has laid out his plan for how he intends to soak the rich
yet again--we know that much--but we don't know yet how he will raise
the other $1 trillion. I can tell everyone where they are going to get
that money. It will come from the middle class; that is where the money
is.
What are all of these tax increases for? A lot of it is for
increasing spending. The Democratic budget would spend more money than
the current CBO budget. I know it doesn't look that way if we look just
at the top lines. We have to dig deeper. What we discover is that the
Democratic budget decides to make a totally different assumption about
the American presence in Afghanistan than what CBO does. We are winding
down our presence in Afghanistan, but the budget doesn't decide that.
That is a separate matter altogether. If we want to compare apples to
apples, we make the same assumptions about ongoing war expenses. When
we do that, we discover that this proposal actually increases spending
at a rate faster than what current law calls for. That is what this
budget would do.
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This budget raises taxes enormously, including very much on the
middle-class because I don't see any other way we can get there. It
also increases spending.
By the way, the only operative year of a budget is the first year. In
the first year, the increase is $162 billion over what we are going to
spend this year. That is a 4.6-percent increase in spending in the year
in which inflation is running around 2 percent, and that is what this
plan is.
Here is what is most objectionable to me about all of the spending
and these huge tax increases. This is a big part of the reason we are
suffering through the worst economic recovery since the Great
Depression. There is no coincidence here. If we look in the post-war
era, in the 3 years following a recession, the economy, on average, has
grown by 14.4 percent. That is the average growth over a 3-year period
after we have had a recession. What is the growth we have had this
time? It is 6.7 percent. It is less than half. This is the worst
recovery in our lifetime, and it is no coincidence.
We have had huge increases in spending, and what has that given us?
It has given us this feeble economic growth, and it has given us an
unemployment rate hovering around 8 percent. We all know that does not
include the millions of Americans who left the workforce altogether.
They have given up looking for work. It doesn't include the many folks
who are underemployed. In fact, we have fewer people working in America
today than we did in 2007. And it never takes this long for an economy
to bounce back and create the jobs that were lost during a recession.
However, it has this time, and it is partly because we are pursuing the
wrong policies.
There is huge government spending, stimulus spending, all kinds of
growth in government, and huge tax increases and the threat of big tax
increases. This is a big contributing factor. Higher taxes reduces
economic growth not only because of the money it takes directly out of
the economy but because of the incentives. It reduces the incentive to
work, to save, to invest. Whatever is being taxed, there is less of for
the person to enjoy who actually created it. Sure enough, as a result,
we get less of that activity. So the more we raise taxes on work, on
savings and investment, the less of it we get. The other thing is that
there are tax increases that are looming in the future--and that day
will come--and people's behavior is affected by it.
Huge growth in government spending and the corresponding deficits we
have seen have a chilling effect on economic growth itself. People
understand that is eventually going to get paid with either higher
taxes or we are going to monetize it and diminish the value of our
currency and have inflation or some combination of those. So all of
this government--of which this budget proposes still more--is part of
the reason our economic growth is so meager.
I have one final point to make on this as it pertains to the budget.
The irony is that growth is the best way to solve all of our problems.
Strong economic growth has a direct benefit for the families who enjoy
it, who benefit from the jobs that are created, the higher wages they
earn, the elevated standard of living, the integrity that comes from
providing for their families. All of those things are the direct
benefits from a stronger economy. There is no better way to deal with
our budget deficit than stronger economic growth.
In fact, the CBO tells us that just one-tenth of 1 percentage point
of sustained increase in the rate of growth in 10 years results in $280
billion of new revenue. That is not completely linear. However, we are
so far below the average that if we just add a full percent, we would
be talking about literally trillions of dollars in additional revenue
and smaller deficits. All of that would come from economic growth in
the context of people who are back to work and an economy that is
booming. That is what we ought to be heading for. Unfortunately, this
budget doesn't take us there.
I know the Senator from Wisconsin wants to speak, and I will yield
the floor in a minute.
I want to say a quick word before I do that about one particularly
important amendment we are going to debate beginning around 2 p.m.
today and vote on hopefully soon. This goes to a small subset of the
tax problems ObamaCare and this budget would create. It is the medical
device tax.
The medical device tax is one of the more egregious flaws in
ObamaCare, in my view. Part of the reason is it is such a badly
designed tax. This tax is badly designed, in my view, because it
applies to total sales, so it is even worse than an income tax
increase, which would have been a bad idea.
This applies a tax to sales, irrespective of whether a company is
making income. So if you are a startup company, if you are a small
growing company or if you are an established company and having hard
times, this is a tax that disregards whether you are operating in the
black and says, We are just going to apply this new tax on your total
sales. That is a very badly designed tax, in my view.
It is a particularly bad idea in a sector that has so many young and
growing and startup companies that have so much promise. They are
making medical devices that are improving the quality of our lives,
saving lives that without these inventions wouldn't be saved, and we
are going to slap a new tax on the sales of some of these companies
that are just trying to get started and not yet profitable. That is a
terrible idea. I know in Pennsylvania, the tax has gone into effect. It
went into effect on January 1 of this year. It is already costing us
jobs, limiting growth, and preventing new factories from being built in
Pennsylvania to manufacture medical devices. It is also making health
care more expensive. We are all consumers of medical devices of various
kinds. We are talking everything from surgical implements to
prostheses, to hip replacement to ordinary health care devices.
Lastly, I would suggest that the existence of this tax makes it
harder to raise the capital to launch new firms and, therefore, it is
going to stifle innovation.
I know there is bipartisan support to repeal this tax. I am very
pleased about that. I wish to thank Senator Hatch for his leadership
for a long time on this. I know Senator Klobuchar has been a great
leader on this issue as well. Several others, including Senator Casey
and myself, feel very strongly about this. I am cautiously optimistic
that this amendment could pass. I sure hope it does. It would be a big
improvement.
At this time I am happy to yield to the Senator from Wisconsin.
The PRESIDING OFFICER. The Senator from Michigan.
Ms. STABENOW. Before my colleague yields, first I am speaking and
taking time off the resolution, but I wish to inquire of my colleague
from Wisconsin as to how long he will be speaking, for the information
of the body. It was my understanding there had been an informal
discussion about having the majority start speaking on the resolution
at 12:45. So just for the purposes of colleagues, I wanted to check on
how long he thought he would be speaking.
Mr. JOHNSON of Wisconsin. Madam President, I was allocated 15 to 20
minutes. I will try to keep it to 15 minutes to yield at the top of the
hour.
Ms. STABENOW. I thank the Senator very much.
Mr. JOHNSON of Wisconsin. Madam President, I ask that my time be used
against our allocation on the resolution.
I wish to commend the Senator from Pennsylvania, who is absolutely
right. I supplied the medical industry for over 31 years, and the
medical device tax will do great harm to medical innovation.
I also wish to commend both the Senators from Florida and
Pennsylvania about their great points on the importance of economic
growth and how important it is that we concentrate all of our efforts
here in Washington on economic growth.
I truly believe that every Member of this body, people serving in
Congress, share the same goals, or the same goal: We want a prosperous
America. We want every American to have the opportunity to build a good
life for themselves and their family. But often folks on the other side
of the aisle accuse Republicans--conservatives--of conducting a war on
women or a war on the middle class. Nothing could be further from the
truth. I will tell my colleagues what is the truth. It is that with all
of our deficit spending here in
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Washington, we are conducting a war on our children. Fortunately, I do
not know of a parent or parents who would willingly drive up their own
personal debt, who would max out their credit cards with absolutely no
intention of ever paying those debts off, but fully intending to pass
those debts on to their children and grandchildren and great-
grandchildren. Again, fortunately, I don't know anybody who would do
that. Yet, collectively as a Nation, that is exactly what we are doing.
We are mortgaging our children's futures.
I ask all Americans to please consider what we are doing in terms of
robbing future generations of the prosperity and the heritage and the
type of opportunity that we should be handing over to them.
An awful lot of people don't quite understand the connection between
our high levels of debt and economic growth. By the way, it is economic
growth that actually strengthens middle-income Americans. But if we
think about our own personal situations, if we in our own family budget
have driven our debt levels up to the point where creditors are calling
us all the time, how are we going to grow our own personal economy? In
other words, how can we increase consumption when all of our extra
dollars are going to pay off our debt, pay our creditors? We are under
a great deal of pressure. The answer to the question is a person can't
grow their personal economy, they can't grow their own personal
consumption. That same economic fact applies to a nation as well. That
is why these high levels of debt are harming economic growth and
harming the very people all this government spending is purporting to
try and help.
One way to take a look at this in terms of the harmful effect of all
of the regulation, all the government debt, is economic growth. The
fact of the matter is, on average, after 14 quarters, the American
economy has grown, after post-World War II recessions, by 19.9 percent.
Under Ronald Reagan, our economy grew 20.1 percent in the first 14
quarters. Under this President, our economy has grown by only 7.5
percent. Again, I would argue an awful lot of that has to do with
regulations, but an awful lot of it has to do with the fact that we
have increased our debt to unsustainable levels. It is scaring
consumers. It is scaring business people away from investing in capital
and growing their businesses.
As Republicans, as conservatives, we want every American to pay their
fair share. We actually want a balanced approach to deficit and debt
reduction. We want more revenue flowing into the Federal Government,
but we want to increase revenue the old-fashioned way: by growing our
economy.
Just a couple of quick little facts. Even with the meager economic
growth we have experienced from 2009 to 2012, revenue has increased to
the Federal Government by a total of $344 billion per year. If we
returned to an economy such as we had in 2007, when revenue to the
Federal government was 18.5 percent of our economy--it was pretty close
to the 50-year average--that would add another $435 billion per year of
revenue.
The tax deal, the ``punishing success'' tax increase that was part of
the fiscal cliff, supposedly will raise $41 billion in the year 2014.
So $41 billion versus $435 billion is a tenth as effective. The problem
with that ``punishing success'' scheme is it puts at risk the very
growth that is far more effective at raising revenue.
So how do we get our fiscal house in order? Well, we actually have to
put our Nation on a glide path toward a balanced budget. We have to
return that level of certainty. Global creditors have to be able to
look at the United States and say, I think they are getting this
situation under control. The only way we can do that is by passing a
budget in this body that actually shows a glide path to balance.
Of course, that is not what the Democratic Senate budget resolution
will do. It never balances. As Senator Toomey was speaking about, we
have to take a look at that first year. In comparison to the CBO
estimate, it actually increases spending by $100 billion. It would
increase our deficit by $75 billion. That is the primary thing we have
to take a look at because these budget resolutions are only about as
good as the paper they are written on, so we have to look at that first
year.
The other point I want to make in terms of this budget resolution is
the claims in terms of deficit reduction are patently dishonest. The
claim to reduce the deficit by $1.85 trillion in comparison to the CBO
baseline is not true. The only way we get that is by comparing apples
to oranges. If we adjust the CBO baseline--for example, the $1
trillion--it counts in more spending, or the $300 billion of Hurricane
Sandy extended spending, or the additional $200 billion of interest. If
we compare apples to apples, this budget at most will reduce the
deficit by $300 billion to $400 billion. Again, what we have to take a
look at is what it does in that first year, which is actually increases
the deficit and increases spending.
This is basically not an honest budget. So my first amendment that I
will be offering is a simple amendment. It would establish a point of
order subject to a 60-vote waiver or appeal that simply requires a
balanced budget in the year 2023. Pretty reasonable. I think the
American public actually expects us to live within our means far before
that date, but this would be a responsible glide path. I think it is an
eminently reasonable amendment, and I certainly hope my colleagues here
in the Senate will support a very commonsense approach to providing
some level of fiscal discipline to our Federal situation.
The second amendment I wish to offer has to do with the financial
situation of States and local governments. Far too many cities are
already going bankrupt. We have a chart here that shows a number of
cities that have already declared bankruptcy and are going through that
process. I think it is extremely important that we here in Congress put
States and local governments on notice that they cannot come to the
Federal Government looking for a bailout. They need to get their own
fiscal house in order. We are not picking on anybody, but it is amazing
when we take a look at the unfunded liability that some of these State
and local governments are facing right now.
The city of Chicago, for example, has an unfunded liability per
household of close to $42,000. I said $42,000 per person. New York City
is about $39,000, and San Francisco is about $35,000.
The point of this amendment is to put State and local governments on
notice that the Federal Government will not be here to bail them out.
They need to get their own fiscal house in order.
The third amendment I intend to offer has to do with recognizing the
truth of the situation with our entitlement programs. At the current
level, at the current path, neither Social Security nor Medicare is
sustainable. So this amendment is also a very simple amendment. It
establishes a point of order that requires in any budget resolution
that we reform both Social Security and Medicare to create a 75-year
solvency. Again, I think that is pretty reasonable. Let me describe why
I think it is so important. I frequently hear all kinds of people claim
Social Security is solvent to the year 2035 or the year 2038. It is a
moving target. Let's take a look at the true picture in terms of the
Social Security financial balance sheet. This comes right from the
Social Security Administration. This is looking ahead to the year 2032,
a mere 20 years' worth of deficits.
It is true that Social Security actually was running surpluses for
decades. It built up a trust fund of--we will talk about that later--
about $2.5 trillion, $2.6 trillion. But in 2010, that situation turned
around. Now Social Security is paying out more in benefits than it is
taking in, in terms of dedicated revenue to the payroll tax. Over the
next 20 years, that total cash deficit will equal $5.1 trillion.
How could anybody, looking at these facts and figures, possibly claim
Social Security is solvent? Well, it is because of the fiction--and it
is fiction--of the Social Security trust fund. I have a couple of
quotes here from the Office of Management and Budget. Talking about the
Social Security trust fund, they say:
These balances are available for future benefit payments
and other trust fund expenditures, but only in a bookkeeping
sense. The holdings of the trust funds are not assets of the
government as a whole that can be drawn down in the future to
fund benefits. Instead, they are claims on the Treasury.
In other words, they are claims against the Federal Government.
[[Page S2078]]
The existence of large trust fund balances, therefore, does
not, by itself, increase the government's ability to pay
benefits. Put differently, these trust fund balances are
assets of the program agencies and corresponding liabilities
of the Treasury.
In other words, we have assets worth $2.6 trillion, we have
liabilities of $2.6 trillion, netting to zero.
One of the analogies I use to describe the trust fund is very similar
to this: If a person has $20 and spends it--by the way, this money is
spent; it is gone--and then that person writes him- or herself a note
for $20 and stuffs it in their pocket and says, Hey, I have 20 bucks,
they really don't. They have a promissory note they will have to give
somebody else to purchase so they can have the real $20 to spend. That
is basically what we have in the Social Security trust fund. It does
exist. It is just worth zero.
But here, ladies and gentlemen of America, as shown in this picture,
is the Social Security trust fund. It is a file cabinet. It is locked.
That is kind of funny because they are actually nonmarketable
securities, but there you go. That is $2.6 trillion worth of value that
supposedly makes Social Security solvent to the year 2035. It is a
fiction. It is false. And until everybody here in Washington starts
truthfully describing the extent of our problem with not only Social
Security but also Medicare--I was part of that group of Senators who
had the privilege of having dinner with the President a couple weeks
ago. I found it very interesting that President Obama accurately
described the problem in reforming Medicare. He said the problem is
that Americans pay in $1 but they get $3 worth of benefits. He also
went on to say we have a problem because most Americans do not
understand that.
Well, today I am asking the President, I am asking Members on the
other side of the aisle to join with Republicans to honestly describe
the problem to the American public. You do not solve a problem until
you first define it and then secondly admit you have the problem. We
have severe problems with Social Security, with Medicare, with other
mandatory spending, with our budget. Until we come to terms with that,
until we are honest with the American people--stop pulling the wool
over their eyes--we have no chance whatsoever of solving these very
severe problems.
So with that, I yield back my time.
The PRESIDING OFFICER (Mr. Heinrich). The Senator from Michigan.
Ms. STABENOW. Mr. President, I will be speaking off of the time on
the resolution for a moment and then deferring to Senator Mikulski in
yielding time to her, as well as our great colleague from Minnesota,
Senator Klobuchar, and others who wish to speak as we proceed with the
debate on this resolution.
Let me take a moment and say that today the House has passed their
budget called the Ryan Republican budget, and it effectively rolls back
health care for women in this country. Our budget does exactly the
opposite. We protect and strengthen access to health care for women.
Under health care reform, which we strengthen and support in our
budget, health insurance plans, as we know, are required to cover
women's preventive care, things such as annual wellness visits,
domestic violence screenings, and contraception, without copays,
coinsurance, or deductibles. The Republican budget that was passed
today would take away those protections. Under the budget they passed
today, 1.3 million women in Michigan alone could lose their health
care.
Insurance plans are now--under what we have passed--not allowed to
discriminate against women. That is part of health reform. Being a
woman is not a preexisting condition anymore. You cannot charge higher
rates, you cannot discriminate in other ways against women in the
marketplace when they are looking to buy insurance. And it would
prohibit insurance companies from denying access to health insurance
for a variety of things, such as being a domestic violence survivor.
The Republican budget in the House would take away those critical
protections.
Until we passed health reform, as many as 60 percent of the
individual insurance plans in this country did not offer basic
maternity care, which I think is shocking. I know that whenever I talk
with folks about that, they cannot believe that basic prenatal care,
which is so important for babies, for women, was not provided. Now it
is under our definition of health care.
The Ryan Republican budget would mean that 1 million women and
children would not have access to maternal or child health services in
Michigan alone. It would mean that 6,000 fewer women in Michigan would
get cancer screenings that could save their lives and that nearly
16,000 children would not get the vaccinations they need to remain
healthy.
That is just one area of many reasons why we need to support the
budget Senator Murray and our committee have put before this body. This
is about focusing on women's health, on middle-class growth in terms of
education and innovation, and on infrastructure investments to grow our
economy. It is important that we are having this debate, and it is
important that the women of the country understand that the budget we
have before the Senate, the Democratic budget, places women as a
priority--their health, the economy for their families, being able to
balance their own budgets, and being able to provide futures for their
children.
I would now like to yield time off the resolution to our great leader
from Maryland, the chair of the Appropriations Committee, a person who,
as we know, showed extraordinary leadership in the last few weeks on
the floor in a very challenging time, dealing with the current budget,
which we have now successfully passed. She also is our leader as it
relates to women's health care and the provisions on women's health
care in health reform that are now impacting and saving women's lives.
I yield time off the resolution--as much time as she would consume--
to Senator Mikulski.
The PRESIDING OFFICER. The Senator from Maryland.
Ms. MIKULSKI. Mr. President, I thank the Senator from Michigan for
her kind words and also her leadership. She is part of our Democratic
leadership team and has been a real champion for jobs that pay a living
wage, jobs that lead to the middle class. She is an advocate for making
sure we have an economy that builds from the middle class out. Also, as
the chair of the full Committee on Agriculture, she has fashioned
bipartisan solutions to help our American farmers, particularly the
family farm, and to feed the hungry here and around the world. I salute
her for her leadership.
Mr. President, I come here today to support the budget put forth by
the Democrats in their resolution, led by the very able chair, Senator
Patty Murray. We are showing that we can govern. Yesterday we passed
the continuing funding resolution in the Senate. It passed 73 to 26. It
showed a bipartisan resolution, a resolve to make sure there is no
government shutdown, slowdown, slamdown. We now have to look ahead to
fiscal year 2014.
I salute Senator Murray for what she has done through her committee.
First of all, she is dealing with sequester, that Draconian approach
that is going to shred government but most of all shred opportunity and
place our fragile economy in jeopardy. She has done it in a balanced
way. At the same time, she has protected seniors, veterans, and our
most vulnerable by making sure she has looked out for Medicare and
Medicaid. Contrasting the Ryan budget, she also showed that she, in our
budget, is not going to throw women and children under the bus. I think
she has done an outstanding job, and I want to support her.
As we look at what we need to do here in the budget, I was appalled,
first of all, to see what the Ryan budget did. Women across America
have to balance their family budgets. They know America also has to get
its fiscal act together. But the entire Ryan budget places the whole
burden of drawing down our public debt on discretionary spending. It
preserves tax breaks and tax earmarks and further squeezes those fiscal
priorities that impact women and children, impact education, impact
empowerment. I think what we have to offer here offers a far greater
vision.
One of the things I am deeply concerned about is its impact on
women's health care. The Senator from Michigan has spoken about it. We
worked on
[[Page S2079]]
making sure that--when we were working on the Affordable Care Act, we
acknowledged the special needs of women. We were appalled in hearings
that I had that women were paying more for their health insurance than
men of comparable age and health status. We were paying a gender tax.
Now, the Affordable Care Act--disparagingly mentioned on the other
side as ObamaCare; affectionately mentioned here as ObamaCare because
the President does--our legislation that we passed in the Affordable
Care Act eliminated gender discrimination in the insurance industry,
that you do not penalize someone because they are a woman.
Then we got right rid of the punitive practices in insurance
companies, one of which was to deny families with children with
preexisting conditions health care. That meant that if you had a child
with autism, if you had a child with cerebral palsy, you could not get
health insurance for the rest of your family--punitive, harsh. We got
rid of that.
Then there was the way they treated the women. Simply being a woman,
as others have said, was a preexisting condition. We were appalled in
our investigation that showed that in eight States you were denied
health insurance if you were a victim of domestic violence. So you were
battered in your own home, and you were battered by your insurance
company. Again, we got rid of those punitive practices.
But the Ryan budget gets rid of the Affordable Care Act. So all of
those reforms--increasing universal access to the working poor, getting
rid of the punitive practices of insurance companies, ending gender
discrimination--will be vitiated. It will be canceled like it did not
happen.
During their campaigns, they said they wanted to repeal and replace.
Well, Paul Ryan repeals, but he does not replace. And do you know what.
We do not need to have it replaced. We need to keep the Affordable Care
Act in place, moving America in the right direction and helping health
care be affordable both to families and to businesses. We cannot allow
the Ryan budget to stand.
But just being against an idea is not good enough. This is why we
support the Murray budget, because she preserves the Affordable Care
Act, and she continues to emphasize those reforms we made in quality
and prevention and integrative services. We know how, through those
quality initiatives, we can save money and save lives.
Others will also speak about Medicare. I cannot believe that we are
going to replace Medicare with a voucher--a voucher and a promise. So
let's get rid of, not deal with, the health care needs of the elderly.
Let's get rid of the financial needs of the Federal Government. So we
would rather protect billionaires than protect senior citizens. I think
we have our priorities wrong.
Others will speak to Medicare. I am going to go to Medicaid. I want
to speak to Medicaid because of our knowledge about who is on Medicaid.
Mr. President, 1.8 million seniors are in nursing homes. What is
Medicaid? Medicaid is the only safety net the middle class has when,
through the ravages of Alzheimer's, Parkinson's, or other chronic,
debilitating disease, you must turn to a long-term care facility, that
you have a safety net to help pay the bill. In order to qualify, you
have to spend down.
I was a leader here, 25 years ago, in trying to reform the spend-down
policy. Twenty-five years later, we have made no reforms. We have had
plenty of attacks but no reform.
We cannot turn Medicaid into a block grant. It is going to endanger
really the ability of sound nursing homes--either by the private sector
or faith-based--in my own State to look at how are they going to fund
this.
All we are doing is funding our problems with public debt onto the
States. Many people here talk about, oh, we need to go to the
Governors. All we are sending to the Governors is more unfunded Federal
mandates. We cannot do this to Medicaid, and we cannot do this to the
middle class.
Instead, we should be investing in research. I say this because my
father died of the ravages of Alzheimer's. We had to spend down the
family savings he earned from working over 60 or 70 hours a week in a
little grocery store. This is not only our story, it is the story of
over 1 million people.
What could we do? I felt so sad for my father. I felt worse because
even though I was a Senator, even though I could get Nobel Prize
winners on the phone, even though I was an appropriator, there wasn't
the cure, the cognitive stretchout for him.
We need to invest in the research. We are on the brink of incredible
breakthroughs in neurological science which could either help fund the
cure for Alzheimer's or do the cognitive stretchout. We need to spend
money to save money. Let's put the money into research and deal with
Alzheimer's, Parkinson's, and Lou Gehrig's disease, debilitating things
which break the family's budget and family's heart but also contribute
to the public debt. We can get there if we make wise and prudent
choices. Most of the people in nursing homes are primarily women over
the age of 80. What are we going to do? Are we going to abandon them?
This budget is unkind to women, but it is also unkind to children in
terms of the opportunity structure.
The Ryan budget caps and freezes Pell grants at $5,645. It requires
families who make less than $20,000 to qualify for a Pell grant. This
means many people who seek Pell grants are single mothers. There is
recent data showing many of our families, 63 percent, are in single-
parent households. It could be a single mother or a single dad, someone
who started out life with hopes and dreams and now has many
responsibilities.
Many wish to return to higher education, particularly the community
colleges which offer gateways to better jobs in the new economy. In my
own State, this could be an associate degree in nursing, in pharmacy
tech or in lab tech. This can help keep people in the middle class in
affordable living. An affordable education will be the gateway into
community colleges. We should be expanding the Pell grants, not
shrinking them. It is a new economy, and it is a new family profile.
I could go over this line item by line item. I know others will be
talking. When we look at women who need health care for themselves, for
their children and their aging parents, the so-called sandwich
generation, the Ryan budget vitiates it, but the Murray budget has a
way to deal with this.
For education and opportunity, for our children, workforce, and
community colleges, the Ryan budget shrinks opportunity and shrinks the
ability of people rising to the middle class or staying in the middle
class.
I think the Ryan budget is a bad prescription for America. The way I
want to deal with the Ryan budget is replace it with a sensible,
balanced approach which looks for the hopes and dreams of the American
people and is not protecting lavish subsidies and lavish tax breaks to
subsidize corporate jets and other such items.
I salute the Senator from Washington State for the great job she
accomplished. I look forward to further debate.
Yesterday, we were able to move the continuing resolution for
funding. I could not have done it without the great staff I have.
Retirement of Charlie Houy
Mr. President, in a few days the U.S. government will say
congratulations and happy retirement to one of our finest public
servants, Charlie Houy. After more than three decades of federal
service Charlie will retire from the Senate Appropriations Committee.
He has served on the Appropriations Committee for more than 30 years,
always following the dictum of his first supervisor, Senator Ted
Stevens, that staff, like children, should be seen and not heard.
Charlie began his Federal service in 1981 working for the Naval Sea
Systems Command as a Presidential Management Intern. He was detailed to
the Defense Appropriations Subcommittee in 1983 and worked as a
majority professional staff member for Chairmen Ted Stevens, John
Stennis, and Daniel Inouye. Charlie was appointed Democratic clerk of
the subcommittee in 1995 by Chairman Inouye and remained in that
position through 2010.
In 2009, Charlie became the 23rd staff director of the full
Appropriations Committee under Chairman Inouye's leadership and did an
outstanding job keeping the trains running to get the committee's work
done and maneuvering the committee through numerous budget minefields.
[[Page S2080]]
During the transition following Chairman Inouye's sudden passing,
Charlie expertly brought me up to speed on the short term and long term
issues I would be facing as the new chairwoman. Just one day after
becoming chairwoman, I found myself managing the Sandy Supplemental on
the Senate floor. Charlie was on my side, and at my side. His advice
and during this period were invaluable. It more than made up for the
fact that he is an avid San Francisco 49ers fan.
His spirit of bipartisanship has earned him praise from members on
both sides of the aisle and both sides of the Dome. Senate Majority
Leader Harry Reid described Charlie as a person ``who has a fantastic
knowledge of what goes on in this country as it relates to money.'' The
late Senator Ted Stevens had this to say about Charlie: ``He is a
consummate expert on defense issues and is well respected by those at
the Department of Defense and his colleagues on the Hill . . . I am
proud to say he is my friend.'' The late Chairman Daniel Inouye
described Charlie as ``one of the finest staff members in the whole
Senate . . .''
His accomplishments and expertise earned him a coveted spot on Roll
Call's Fabulous 50 staffers for his mastery of policy and procedure and
his ability to influence agendas and legislation.
President Harry Truman once said, ``It's amazing what you can
accomplish if you don't care who gets the credit.'' This personifies
Charlie. In a town where most people are clamoring over each other for
the spotlight, Charlie has used a quiet humility and a tireless work
ethic to accomplish great things for our country.
I would also like to recognize and thank Charlie's wife Sharon and
his daughter Cassie. Working in the Senate for more than 30 years,
there were many late nights and weekends that required Charlie to miss
out on family events, crew regattas, and vacations. Thank you for
lending us your husband and father during those times.
Mr. President, I stand here today to express my deepest appreciation
to Charlie Houy for serving the Senate Appropriations Committee, the
Senate, and the American people with integrity and intelligence. His
tireless contributions to our nation have been outstanding. I wish him
well as he leaves the U.S. Senate for new adventures.
I yield the floor.
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. Mr. President, I ask unanimous consent this discussion
be taken from the resolution time.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mrs. MURRAY. Let me thank all the women Senators who are down here
speaking so eloquently about the importance of passing a budget
resolution which reflects the values and needs of women in this country
and the men who are important to them.
I wish to especially thank our dean of women, Senator Mikulski, who
has made this a lifetime passion to ensure the women who come after her
have the strength and ability to participate in the economy in any way
they wish. I thank her and the other Senators for their leadership.
Senator Klobuchar will continue this discussion.
The PRESIDING OFFICER. The Senator from Minnesota.
Ms. KLOBUCHAR. I wish to thank Senator Murray for her leadership on
this budget. This is not an easy thing. We all know this. She actually
has been working on this many years. I am very proud of this budget and
the work which has been done here, the balanced approach which has been
taken.
I wish to thank Senator Mikulski, the Senator from Maryland, our
fearless leader of the women Senators, who has been there since the
beginning and understands these fights in a different way than many of
us who are new can't imagine. We will need to continue moving forward
for the women of this country and can never step backward, which is
where I wish to begin discussing this budget.
The budget Senator Murray has proposed is a budget which moves us
forward. For a long time, Democrats and Republicans in the Senate have
been talking about how we need to get $4 trillion in budget reduction
and deficit reduction over the next 10 years.
We have done $2.4 trillion. It is a start. It is not all we need to
do, but it is a start. Of that amount, the $2.4 trillion, 70 percent
was in cuts. When we look at the proposals which have been made by
Simpson-Bowles, Rivlin-Domenici, the Gang of 6, all the groups which
have worked on a very strong bipartisan basis, they have all proposed
something like 2 to 1 on spending cuts to revenue.
The proposal which has been made on the House side which passed in
the House today isn't even close to that. In fact, when we look at
Congressman Ryan's budget, there isn't revenue in this budget. He does
include some of the past revenues. Even when you do that, that is a 10-
to-1 ratio of spending cuts to revenue for this country going forward.
It is not the right mix. Yes, we need to balance our budget, but we
also need a balance which is budgeted.
The last thing we need to do is balance our budget on the backs of
women and children. This is why it is important for people. I will
return later to speak about some of the economic issues in my State and
why it is so important to move forward and have a budget with a
balanced mix of spending cuts and revenue. I truly believe we need a
deal here. We need to bring this debt down. It is very important to me
because I think it will trigger investment. We need to do it in the
right way.
Today, I am focused on one issue; that is, the effect this budget
would have on women and children, the budget proposed in the House
versus the budget Senator Murray has put together.
It is no coincidence the Senator who is leading us through this
budget process is the same Senator who joined me last spring when the
Violence Against Women Act was on the floor. We needed to rally all 17
women Senators behind us. At the time people thought it was stuck, it
was a gridlock and wasn't going anywhere. Then all the women Senators,
Democrats and Republicans, came together.
Patty Murray was the leader in this effort. This is why this Senate
budget not only maintains but increases critical funding for the
Violence Against Women and Family Violence Program. This will give law
enforcement better tools for responding to cases of domestic violence
and sexual assault, programs which make sure mothers and children have
a safe place to go and programs which help victims get back on their
feet again. Even more important, this includes programs which save
lives.
As a former prosecutor, I know firsthand how important the Violence
Against Women Act has been. We were very pleased it was reauthorized on
such a strong bipartisan basis. It is incredibly important, not just
for those individual victims but for entire families and entire
communities. Statistics show kids raised in violent homes are 76 times
more likely to be perpetrators of these crimes when they grow up.
This is why I truly appreciate Senator Murray's work to ensure we
have a policy in place, which is something we worked on in the
Judiciary Committee. I see Senator Hirono from Hawaii. We worked hard
on this, as it is important, but also the funding is in place. We
consolidated programs, reduced funding with the Violence Against Women
Act and did different things in the last Violence Against Women Act to
make it more efficient. This is fully funded in this bill, and it is
very important for people to know who care about this.
As to health care, something which is very important to our kids, the
House budget, as has been noted by Senator Stabenow and others, would
slash billions of dollars in basic health care services for children,
including prenatal care for expectant moms and vaccinations for kids.
Under the House proposal, more than 33,000 women would lose access to
maternal and child health care services in Minnesota alone. Meanwhile,
another 8,551 children would lose access to lifesaving immunizations.
This is only in my State.
Sadly, after the devastating flu season we just experienced, with
many children dying across this country, how could anyone think it is a
good idea to cut funding for vaccination programs? How could that be
one of the proposals in this budget. There are so many loopholes we
could close, so many tax subsidies we could eliminate. Why would we cut
kids' vaccinations? Sadly, this is what happened in the House today.
[[Page S2081]]
While we are on the subject of health care, I also wish to point out
the House budget would cut funding for the National Breast and Cervical
Cancer Early Detection Program, meaning hundreds of thousands of women
would lose access to mammograms, pap smear tests, cervical cancer
screening, which is the tip of the iceberg. By repealing the Affordable
Care Act, the House budget would threaten preventive care for women
across this country. The Ryan budget would eliminate the important
reforms to improve patient care, already noted by Senator Mikulski and
Senator Stabenow. It would eliminate the important reforms to improve
patient care and the delivery system which is included in the health
care bill.
What is interesting to me is Congressman Ryan does acknowledge the
Affordable Care Act has some very good savings in it because he
includes those over $700 billion in savings in his budget.
This is great, but then he cuts out all those budgets I spoke about
which were so important to the American people: to not be banned from
health insurance because you have a preexisting condition and to be
able to keep kids on their parents' insurance until they are 26 years
old. I am looking forward to that with my own daughter.
The third thing I mentioned is closing the doughnut hole for our
seniors. Those things are all being cut under this budget.
We have had this debate too many times already. I wish to be clear;
the Senate budget not only protects core funding for preventive
services but upholds the Affordable Care Act and its most important
provisions for women and children.
Let's turn to another front to see how women and children of this
country, particularly children, fare and this is education. On the
education front, the Senate budget--while still making $975 billion in
cuts, $975 billion in spending cuts--still maintains core funding for
early education through the Head Start Program. The House budget, when
combined with sequestration, would push almost 200,000 low-income
children out of the program in 2014.
We all know education is one of our best investments. When we look at
the global economy and education growing across this country, we are
getting real competition from other countries. The last thing we need
to do is cut back on education.
This is why the Senate proposal includes continued support for
elementary and secondary schools through programs such as IDEA, the
ladder which provides early intervention in special education services
to kids with disabilities. Our budget also makes key investments in
improving literacy and increasing the emphasis on STEM, science,
technology, engineering, math.
This is the future. We want to train our own kids in America, as
Senator Sanders is well aware, to ensure they have the skills to be
able to compete on the international stage.
What does the House budget do? It slashes close to $1.2 trillion of
investments in education, skills training, science and technology, R&D,
transportation and infrastructure over the next 10 years.
Do you know what I think. I think that is being penny wise and pound
foolish and not what we should do in the budget for the United States
of America. I truly believe we have an amazing opportunity right now.
We have seen better unemployment numbers than we have seen in 4 years.
The housing market is starting to turn around. People are starting to
go back to work. It is not nearly where it should be. The last thing we
need to do is go backward. The last people who want to see us go
backward are the women of America.
I was listening as Senator Stabenow spoke about the health care bill,
the Affordable Care Act, and during the Finance Committee there was a
debate about whether maternity care should be included in the mandatory
benefits. One of our colleagues at the time said: I don't understand
why maternity benefits should be included. I never needed them.
Without missing a moment, Senator Stabenow looked across the table
and said: I bet your mother did.
There are a lot of mothers around America right now who are looking
at these budgets because these budgets represent values, the future of
our kids and the women and men of this country.
Let's bring our spending down. Let's get over the $4 trillion figure
we are supposed to get out of the debt reduction but do so in a way
which doesn't hurt middle-class families and doesn't hurt the families
most vulnerable. I know we can do it. We are a great country.
I yield the floor.
The PRESIDING OFFICER. The Senator from Hawaii.
Ms. HIRONO. Mr. President, before I begin my remarks, I wish to thank
Senator Mikulski for the tremendous work she did on the continuing
resolution. I know she worked so hard, and yet she is on the floor
today to talk about how important passing the Murray budget is. And of
course Senator Murray is on the floor also, and I want to thank her for
her great work.
I stand in solidarity with all the men and women, my colleagues, who
are going to be talking about how important it is to pass the Murray
budget, which is a balanced budget that reflects our priorities and our
values. The last few years have been hard for families across the
country. Our economy is still struggling its way out of a great
recession, the worst economic crisis since the Great Depression. And we
have made progress. For example, the economy has grown and millions of
people are back to work. But this progress is not fast enough for too
many families in Hawaii and across our Nation.
Regrettably, that doesn't seem to concern some of our colleagues in
the House of Representatives. The budget proposed by the House
majority, the Ryan budget, would set our economic recovery back and it
would do so on the backs of those who can least afford it. Some of the
hardest hit will be women and children, the very people who face some
of the biggest challenges in today's economy. So I want to focus on how
the Ryan budget negatively impacts women in our country.
Women in Hawaii make 82 cents for every dollar earned by a man for
the same job. Monthly food costs in Hawaii are 61 percent higher than
in the rest of the country. Forty percent of Hawaii households pay more
than 40 percent of their monthly income on housing. Hawaii residents
pay some of the highest gasoline prices in the country, which we all
know can be a serious hardship on family budgets. Our high cost of
living is one of the reasons we have a high percentage of women working
in two-parent households in Hawaii.
Across my State and across our country, women are waking up every
day, working hard, and making ends meet in any way they can. These
challenges I mentioned are being overcome every single day by
determined women. They work hard to improve their lives and to give
their children an even greater shot at success than they had. For many,
the support they receive for health care, education, childcare, paying
for food and housing, makes all the difference. Unfortunately, the Ryan
budget lays out a vision of America where these people, our families,
are left behind.
We are told that budgets reflect our values. I agree. What are the
values exemplified and reflected by a budget, the Ryan budget, that
makes deep cuts in supports such as the Supplemental Nutrition
Assistance Program--SNAP--and the Women, Infants and Children--WIC--
Program? Combined, SNAP and WIC help put food on the table for over 50
million--I repeat, 50 million--Americans, primarily women and children.
The SNAP cuts in the Ryan budget would put over 180,000 families in
Hawaii at risk of losing the ability to put food on their table.
What could be more fundamental than putting food on the table? I
don't know anyone who could look these families in the eye and say:
Sorry that you can't afford to feed your children anymore. We have to
balance the budget. We need to close the deficit. Sorry. That, to me,
is unconscionable and runs counter to our core values.
The Ryan budget would also deeply cut childcare assistance and Head
Start, as mentioned by my other colleagues, leaving more than 2 million
children and their families without realistic early childhood or
daycare.
In addition, the Pell Grant cuts in the Ryan proposal would make
college
[[Page S2082]]
less affordable for 6 million women students. Add to that the millions
of male students and you are affecting the future education of our
country.
These cuts don't just hurt families now, they force parents to choose
between jobs and caring for children. They prevent kids from accessing
early learning opportunities that we know are vital to enabling these
children to succeed in school and in life.
The Ryan budget also slashes support for things such as public
transit, housing assistance, and community development. Each of these
investments helps make our communities better places to raise a family,
which attracts businesses and creates jobs.
Finally, and most egregiously and seriously, in my view, the Ryan
budget cuts health care for women of all ages by repealing ObamaCare.
By repealing ObamaCare, the Ryan budget takes us back to when being a
woman was a preexisting condition, thereby disqualifying her for health
insurance or costing her many times more for coverage. If we repeal
ObamaCare, analysts project that insurance companies could charge women
over $1 billion more in premiums than men are charged for the very same
coverage. So by repealing ObamaCare, the Ryan budget discriminates
against women. And since when is discriminating against women a core
value?
While ObamaCare requires that insurers cover maternity care, only 12
percent of plans on the individual market do so currently. Repealing
ObamaCare would also undermine access to reproductive health and family
planning services.
Now let's talk about how the Ryan budget would affect seniors.
Seniors in our country know the Ryan budget will end Medicare as we
know it. They know these changes will force millions of women--and, of
course, men--to make do with a voucher for their medical care--a
voucher of decreasing value. And since so many women receive lower
Social Security benefits than men, while paying higher out-of-pocket
health care costs, losing Medicare coverage could be the difference for
them between food, housing, or lifesaving medication. Now is not the
time to be making huge cuts to investments in programs that provide the
very economic security we should be working to improve.
Fortunately, the priorities laid out in Chairman Murray's budget
would help to strengthen the economic security so many families are
seeking. The Senate budget resolution prioritizes creating new jobs,
expanding opportunity, and laying out a strong foundation for economic
growth. It builds on the progress we have made over the past few years
instead of tearing that progress down.
I applaud Chairman Murray for prioritizing the elimination of the
sequester, which the Congressional Budget Office says could eliminate
750,000 jobs. I also applaud her foresight in including investments in
early childhood education, clean energy, national security, our
veterans and our seniors, and her bill preserves access to health care,
opportunities for higher education, and programs such as SNAP and WIC.
These supports are vital to keeping our economy moving in the right
direction.
The Murray plan will help improve American competitiveness, foster
innovation, and open more opportunities for small businesses to
succeed, and it lays out a blueprint for responsibly paying for these
investments and reducing our deficit in a balanced way. Each and every
one of these priorities helps to improve the economic security of men
and women and children--families--in our country.
I hope my colleagues will join me in supporting the Murray plan, a
plan that provides a foundation for growth, instead of a plan that
takes a meat-ax approach to the economic security of millions of
families in our country.
I yield the floor.
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. Mr. President, I want to thank the Senator from Hawaii
for joining a number of very strong Democratic women to talk about the
importance of our budget for women in this country, and I appreciate
her strong voice here in the Senate.
I yield 30 minutes off the resolution to the Senator from Vermont,
who is a great member of our Budget Committee and contributes so much
thought to all of it. We appreciate all his work.
The PRESIDING OFFICER. The Senator from Vermont.
Mr. SANDERS. Mr. President, I thank Senator Murray for yielding, and
I want to thank her and her staff for the excellent work they have
done. As a member of the Budget Committee, I have enjoyed working with
them.
Everybody knows our country has an $850 billion deficit and a $16-
plus trillion national debt. But what has not been discussed as often
as it should be is how we came into that financial position. How do we
have the deficit and how do we have this huge debt?
Let us not forget, as we discuss this issue, that in January of 2001,
when President Bill Clinton left office, this country had an annual
Federal budget surplus of $236 billion. A surplus of $236 billion in
January 2001. We now have an $850 billion deficit. So what happened?
Well, I think many Americans know what happened. When you go to war
in Afghanistan and Iraq and you don't pay for those wars, you add to
the deficit. When you give huge tax breaks to the wealthiest people in
this country and you don't offset that, you add to the deficit. When
you pass a Medicare Part D prescription drug program and you don't pay
for that, you add to the deficit.
And on top of all of that, we must understand that right now, at 15.8
percent of GDP, revenue coming into the Federal Government is the
lowest it has been in 60 years. The reason for that is we are in the
midst of a very serious recession--a recession caused by the greed,
recklessness, and illegal behavior on Wall Street. Not only has that
led to significant increases in unemployment and businesses going
under, once again, it resulted in less tax revenue coming in to this
government.
And by the way, when we talk about Wall Street and the greed and the
recklessness and illegal behavior on Wall Street, I must say I was
stunned when the Attorney General of the United States recently
suggested it might be difficult to prosecute Wall Street CEOs who
commit crimes because of the destabilizing effect that prosecution
might have on the financial system of our country and the world. In
other words, we have a situation now where Wall Street is not only too
big to fail, they are too big to jail. The theory is, if you are just a
regular person and you commit a crime, you go to jail. If you are the
head of a Wall Street company, your power is so great, the tentacles of
that company are so great, that if you are prosecuted, and there is
destabilization in that company, it can have worldwide or national
implications. That is an issue we have to think long and hard about. We
are supposed to be a country of law, and that law should apply to the
CEOs of Wall Street companies as well as everybody else.
The other point I want to make deals, if you will, with a moral
issue. When you are dealing with a deficit situation--and I just
described how we got into the deficit situation--and you say we need to
make sacrifices, it is absolutely appropriate to ask who is best able
to make those sacrifices. Right now, as I think most Americans know,
the wealthiest people in this country are doing phenomenally well.
Large corporations are enjoying record-breaking profits. That is one
group of people. Meanwhile, the middle class of this country is
disappearing, and we have 46 million people living in poverty. So
common morality, basic morality, says who should we ask most
significantly to help us with deficit reduction? Do we tell an
unemployed worker who is struggling to keep his or her family afloat
that we are going to balance the budget on their back or do we ask, a
huge profitable corporation, that in some cases is paying nothing in
taxes, to help us with deficit reduction?
It is important for us to do what we do too rarely on the floor of
the Senate--take a hard look at what is happening to the American
people right now. I am very pleased we are seeing more job creation.
Good thing. We are seeing somewhat of a recovery in housing. Very good
thing. But let us understand where the middle class of this country is
today, where the working class of this country is today before we
demand that we balance the budget on their backs, as the Ryan budget in
the House does.
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Since 1999, the average middle-class family has seen its income go
down by nearly $5,000 after adjusting for inflation. Median family
income today is lower than it was in 1996. Real unemployment is not 7.7
percent, it is 14.3 percent if you count those people who have given up
looking for work and are working part time. Youth unemployment is even
higher. More than 25 percent of young Americans are unemployed. In
terms of the African-American community, unemployment is off the
charts.
When we talk about job creation, we all want job creation. However,
it is important to understand that nearly 60 percent of the new jobs
that have been created since 2010 are low-wage jobs paying between
$7.80 an hour and $13.80 an hour.
Jobs, yes. But we want jobs that can take care of families, not just
low-wage jobs.
Further, when we are talking about the budget, we don't talk about
this at all. I know my Republican friends don't talk about it; most of
my Democratic friends don't talk about it. It is anathema here to talk
about issues of distribution of wealth and income, but I think it is
important before we talk about on whose backs we are going to balance
the budget.
Today the United States has the most unequal distribution of wealth
and income of any major country on Earth, and the gap between the very,
very wealthy and everyone else is growing wider and wider. Incredibly,
the wealthiest 400 individuals in this country today own more wealth
than the bottom half of America, 150 million people. I think that is an
issue we might want to discuss even if it offends some of our wealthy
campaign contributors, but I think we should put that on the table.
Today one family--the Walton family of Walmart--owns more wealth than
the bottom 40 percent of families in this country. And by the way, you
will all be delighted to know they got a huge tax break recently.
Today the top 1 percent owns 38 percent of all financial wealth. That
is a stunning number. What is even more stunning is the bottom 60
percent owns 2.3 percent of the wealth in this Nation. One percent on
top owns 38 percent of the wealth; the bottom 60 percent owns 2.3
percent. And who do Mr. Ryan and my Republican friends want to balance
the budget on? Those 60 percent, the working families who already have
nothing, who are losing what they have, who are struggling to keep
their heads above water.
But it is not just distribution of wealth, it is distribution of
income. If you can believe it--this is again a stunning fact which, for
some reason, we don't talk about too much here on the floor. A recent
study shows that had all of the new income gained from 2009 to 2011
gone to the top 1 percent, 99 percent gained nothing. So who do we
balance the budget on? Of course you go after the middle class, go
after the working class, go after low-income people. Well, maybe
somebody might want to ask that 1 percent to start paying a little bit
more in taxes before we cut Social Security, Medicare, Medicaid,
education, and nutrition.
One of the good parts of the Murray budget is that it provides $100
billion in funding to put millions of Americans back to work rebuilding
our crumbling infrastructure. I would have gone much higher. Because
while deficit reduction is a very serious issue, it is even more
important that we start putting millions of people back to work who are
in desperate need of employment. The fastest way to do that is to
rebuild our crumbling infrastructure. One hundred billion is a good
start. We need more.
During the consideration of the budget resolution, I plan on offering
two amendments. The first, amendment No. 264, would create a reserve
fund to reduce the deficit and create jobs by eliminating offshore tax
abuse by large profitable corporations. The second, amendment No. 198,
would establish a deficit-neutral reserve fund to protect the benefits
of disabled veterans--and I speak as chairman of the Veterans' Affairs
Committee--disabled vets and their survivors by not enacting the so-
called chained CPI. I am pleased that this amendment is being
cosponsored by Senator Harkin and Senator Hirono. Let me take a few
minutes to describe both of these amendments.
At a time when corporate profits are at an all-time high, when the
effective corporate tax rate is at a 40-year low, when one out of four
profitable corporations pays zero in taxes, it is time for large
profitable corporations to significantly contribute to deficit
reduction.
The first amendment I will be offering would create a reserve fund to
reduce the deficit and create jobs by eliminating offshore tax abuse by
large profitable corporations. In 2011, corporate revenue as a
percentage of GDP was just 1.2 percent. That is lower than any other
major country in the Organization for Economic Cooperation and
Development, lower than Britain, Germany, France, Japan, Canada, you
name it. Each and every year, corporations and the wealthy are avoiding
more than $100 billion in U.S. taxes by sheltering their income
offshore. Offshore tax schemes have become so absurd that one five-
story building in the Cayman Islands is now the home to more than
18,000 corporations.
When the Bank of America, Goldman Sachs, JPMorgan Chase, and
Citigroup needed a taxpayer bailout in 2008--and I did not vote for
that bailout--they told us what great Americans they were, how much
they love the United States of America, proud to be an American. But
when it comes to paying their taxes, these large Wall Street companies
are proud to be with the Cayman Islands. So my suggestion to these
corporations: Next time you need a bailout, don't come to the taxpayers
of America. Go to the people of the Cayman Islands and get your bailout
there. But so long as you are an American company, how about helping us
with deficit reduction and paying some taxes in this country?
But it is not just Wall Street. You have pharmaceutical companies
such as Eli Lilly and Pfizer also using offshore tax havens. Apple
wants all the advantages of being an American company, but it doesn't
want to pay American taxes or American wages. It creates the iPad, the
iPhone, the iPod, and iTunes in the United States, manufactures most of
its products in China, and then ships most of its profits to Ireland,
Luxembourg, the British Virgin Islands, and other tax havens to avoid
paying U.S. taxes.
This is a huge issue. By the way, it is not just an American issue.
It is an issue facing governments all over the world: Corporations run
to tax havens, Cayman Islands, Bermuda, and elsewhere. We have got to
address that issue.
I am going to list for the Record 15 large profitable corporations
that have used offshore tax havens to avoid paying U.S. income taxes in
recent years. At the top of the list, Bank of America. In 2010, Bank of
America set up more than 200 subsidiaries in the Cayman Islands to
avoid paying U.S. taxes. It worked. Not only did Bank of America pay
nothing in Federal income taxes but it received a rebate from the IRS
of $1.9 billion that year.
Before you cut Social Security and Medicaid and Medicare, do you
think maybe we might want to ask Bank of America--which we bailed out,
by the way--to help us with deficit reduction?
General Electric during the last 5 years made $81 billion in profits.
Not only has General Electric avoided paying Federal income taxes
during these years, it received a tax rebate of $3 billion from the
IRS. GE has at least 14 offshore subsidiaries in Bermuda, Singapore,
and Luxembourg.
Citigroup, Verizon, Honeywell International, JPMorgan Chase, Merck,
Corning, Boeing, Goldman Sachs, Microsoft, Qualcomm, Caterpillar, Cisco
Systems, Dow Chemicals, major profitable corporations using tax havens
to avoid paying in the United States of America. We have an amendment
to deal with that issue, and I hope we can have bipartisan support for
that amendment.
Now I want to talk about my second amendment, and now I speak as
chairman of the Veterans' Affairs Committee.
This amendment, No. 198, would establish a deficit-neutral reserve
fund to protect the benefits of disabled veterans and their survivors
by not enacting the so-called chained CPI. I am pleased this amendment
is being cosponsored by Senators Harkin and Hirono.
The time has come for the Senate to send a very loud and clear
message to
[[Page S2084]]
the American people: We will not balance the budget on the backs of
disabled veterans who have lost their arms, their legs, and their
eyesight defending our country. We will not balance the budget on the
backs of the men and women who have already sacrificed for us in Iraq
and Afghanistan, nor on the widows who have lost their husbands in Iraq
and Afghanistan defending our country. And we will not balance the
budget on the backs of those who served so valiantly in World War II,
the Korean war, the Vietnam war, the gulf war, and other conflicts, by
cutting Social Security benefits. We will not the adopt the chained
CPI.
The chained CPI is forcefully opposed by every major veterans
organization in this country. I have talked to many of them, and they
are outraged after the sacrifices veterans have made that people want
to balance the budget on their backs. All veterans organizations are in
opposition to the chained CPI, and that includes of course the American
Legion, the VFW, the Disabled American Veterans, the Iraq and
Afghanistan Veterans of America, Gold Star Wives, DAV. You name the
veterans organization, and they are in opposition.
But it is not just the veterans organizations that oppose the chained
CPI. The chained CPI is opposed by every major senior citizen group in
this country--including the AARP, the largest senior group. And I
understand they have been calling Members of the Senate and the House,
and I hope Members will listen to what the AARP has to say--and the
National Committee to Preserve Social Security and Medicare, and the
Alliance for Retired Americans.
The chained CPI is opposed by every major union in this country. I
had a press conference not so long ago with Rich Trumka of the AFL-CIO.
They are strongly opposed to the chained CPI. The chained CPI is
opposed by every major disability group in this country. It is opposed
by the National Organization for Women, because they understand what
the chained CPI would mean for women.
There are some who believe that lowering costs of living
adjustments--COLAs--through the adoption of a chained CPI would be just
a minor tweak in benefits. Let's be clear. For millions of disabled
veterans and seniors living on fixed incomes, the chained CPI is not a
minor tweak. It is a significant benefit cut that will make it harder
for permanently disabled veterans and the elderly to feed their
families, heat their homes, pay for their prescription drugs, and make
ends meet. This misguided proposal must be vigorously opposed.
In one moment or another everybody here has talked about how they
want to save Social Security, because they know that back home Social
Security is enormously popular. In poll after poll--whether you are
Democrat, Republican, Independent--what people are saying is, Don't cut
Social Security. Don't cut benefits for disabled veterans. Now we are
going to give Members on both sides of the aisle the opportunity to act
on what they have been saying for many years.
Supporters of the chained CPI want the American people to believe
that the COLAs for the disabled vets, senior citizens, and the
surviving spouses and children who have lost loved ones in combat are
too generous. For any senior citizen who is listening to this, the
theory behind the chained CPI is the benefits that you have been
getting are too generous. And whenever I say this in Vermont, people
start laughing. They really do. And I have to say, No, they are not
kidding, they are serious.
At a time when some think these benefits are too generous, we should
understand that in 2 out of the last 4 years disabled vets and senior
citizens did not receive any COLA at all, zero. So I guess a zero COLA
is too generous. And this year's COLA of 1.7 percent is one of the
lowest ever at a time when prescription drug costs for seniors are
going up, health care costs for seniors are going up, heating costs in
cold weather States such as mine are going up, food costs are going up.
And yet seniors got a 1.7 percent COLA, and there are people who say
that is much too generous.
Today, more than 3.2 million disabled vets receive disability
compensation benefits from the VA and would be negatively impacted by
the chained CPI. Are you really ready after all the great speeches we
hear--speeches of thank you to the veterans who put their lives on the
line, who gave their lives defending this country--do you really want
to cut those benefits for those who lost their arms, their legs, their
eyesight? I hope not.
Under the chained CPI, a disabled veteran who started receiving VA
disability benefits at age 30 would have their benefits cut by more
than $1,400 at age 45; $2,300 at age 55; and $3,200 at age 65. For our
Wall Street friends, the people who make millions of dollars a year,
that is not a lot of money. But for people who are trying to survive on
$20,000, $25,000, $15,000 a year, that is a big hit. In my view, if you
respect veterans and the sacrifices they have made, if you respect the
``greatest generation'' and what they have done to make this country
great, you do not balance the budget on their backs.
Let me just conclude by saying I have been to Walter Reed, and I have
seen what war has done to veterans. Many of my colleagues have done the
same. In Vermont we paid a very heavy price for the Iraq war. I have
been to too many funerals. I know many of my colleagues have done the
same. I just ask that before we support this so-called chained CPI,
which will make devastating cuts on the backs of disabled veterans and
senior citizens, we remember the sacrifices those people made.
Let me ask unanimous consent to have printed letters in opposition to
the chained CPI that I have received from the American Legion, Disabled
American Veterans, Veterans of Foreign Wars and several other veterans
organizations.
Let me quote from a letter I received from the National Commander of
the American Legion, Jim Koutz, in opposition to the chained CPI:
On behalf of the 2.4 million members of The American Legion
I voice our opposition to [the chained CPI] because of the
harmful effects it will have on veterans' and Social Security
benefits . . . Under the chained CPI, which cuts the formula
used to determine the COLA for VA benefits, disabled veterans
who receive this benefit would have their benefits reduced by
thousands of dollars over their remaining lifetimes . . . The
American Legion understands the need to restore fiscal
discipline, but it should not be done by reneging on this
country's promises to its veterans who already have earned
these benefits through their service to country . . . For
these veterans and their families, reducing the current COLA
represents real sacrifice . . . We ask you not to do harm to
those who have already sacrificed so much for this great
nation.
I ask unanimous consent to include the American Legion letter in the
Congressional Record.
Let me also quote a letter I received from the Executive Director of
the Disabled American Veterans--DAV, Barry Jesinoski:
On behalf of all disabled veterans and their families, we
stand with you in firm opposition to the application of the
chained CPI to disability and pension payments for veterans,
dependents and survivors of veterans. In recent years, it has
become apparent that even the current COLA has failed to meet
the rising costs faced by disabled veterans, their dependents
and survivors. Lowering VA benefit payments using a new
formula designed to reduce federal spending at large seems an
unconscionable policy and would threaten their financial
security and must be rejected. America's heroes deserve
better from a grateful and caring nation.
I ask unanimous consent to print the DAV letter in the Congressional
Record.
Let me also quote from a letter I received in opposition to the
chained CPI from the Veterans of Foreign Wars, the Paralyzed Veterans
of America, the Blinded Veterans Association, Gold Star Wives, the Iraq
and Afghanistan Veterans of America, the Vietnam Veterans of America,
and several other veterans' groups, in one letter. They came together
and here is what this letter says:
As efforts to address our nation's debt continue, we are
writing to express our opposition to changing the formula
used to calculate the annual cost of living adjustment (COLA)
because of the harmful effects it will have on veterans and
Social Security benefits. We agree that political leaders
need to restore fiscal discipline, but we believe it should
be done with great care and without reneging on this
country's promises to veterans, including the promises of
Social Security and VA disability compensation and pension
benefits--all of which are modest in size. Many veterans who
rely on these programs live on fixed incomes and very tight
budgets. For them, every dollar of hard-earned benefits
counts in meeting basic expenses, attaining quality of life,
and building
[[Page S2085]]
a better future for themselves and those who depend on them.
For many of them, reducing the annual COLA would mean real
sacrifice. We ask that you not do that for those who have
already sacrificed so much for this great country.
I ask unanimous consent that letter be printed in the Record.
So here we are. We are in this deficit situation because of wars that
were unpaid for, tax breaks for the wealthiest people in this country,
Medicare Part D not paid for, and a recession caused by Wall Street.
Now we have folks who are saying we have a serious deficit problem. I
agree.
The way we are doing it is to make devastating cuts on the backs of
some of the most vulnerable people in this country, including disabled
vets and including people who receive Social Security and disability
benefits. I do not think that is the moral thing to do. I do not think
that is the economically appropriate thing to do.
When you have one out of four major corporations, huge corporations,
profitable corporations paying zero in taxes; when the corporate tax
rate today, the effective corporate tax rate is the lowest it has been
in decades; when the gap between the very wealthy and everybody else is
growing wider; there are ways to do deficit reduction that are fair.
I will do everything I can to make sure that as we go forward with
deficit reduction we do it in a way that is fair and not on the backs
of some of the most vulnerable people in this country.
There being no objection, the material was ordered to be printed in
the Record, as follows:
December 12, 2012.
Hon. Harry Reid,
Majority Leader, U.S. Senate, Washington, DC.
Hon. John Boehner,
Speaker, House of Representatives, Washington, DC.
Hon. Mitch McConnell,
Republican Leader, U.S. Senate, Washington, DC.
Hon. Nancy Pelosi,
Democratic Leader, House of Representatives, Washington, DC.
Dear Leader Reid, Leader McConnell, Speaker Boehner, and
Leader Pelosi: As efforts to address our nation's debt
continue, we are writing to express our opposition to
changing the formula used to calculate the annual cost of
living adjustment (COLA) because of the harmful effects it
will have on veterans and Social Security benefits.
The Congressional Budget Office estimates that adopting the
chained consumer price index (CPI) to calculate annual COLAs
could save the government $208 billion over ten years by
reducing Social Security, disability, and other benefits, and
by increasing revenues. More than half of this amount--$112
billion--would come from Social Security cuts, which veterans
rely on very heavily for both retirement and disability
benefits. Another 11 percent of the savings--$24 billion--
would come from VA benefits, civilian pensions, and military
retirement pay.
We estimate that use of the chained CPI would have a
significant effect on benefits that millions of veterans
depend on in the following ways:
Social Security Retirement Benefits: Social Security is one
of our nation's most important programs serving veterans and
their dependents and survivors. It currently pays benefits to
over 9 million veterans--about 4 in 10. The average
retirement benefit of a veteran receiving Social Security was
about $15,500 in 2010. Adopting the chained CPI would
significantly reduce those benefits, by changing the manner
in which COLAs are determined. A veteran with average
earnings retiring at age 65 would get nearly a $600 benefit
cut at age 75, and a $1,000 cut at age 85. By age 95, when
Social Security benefits are probably needed the most, that
veteran would face a cut of $1,400--a reduction of 9.2
percent.
Not only would a Social Security COLA cut hurt veterans and
their families; it is also misguided policy. Social Security
is self-financed by the contributions of workers and
employers. In effect, it belongs to its contributors. It is
separate from the rest of the budget. To use it to reduce the
federal deficit, which it did not cause, or effectively to
fund other parts of the government or to help maintain tax
breaks unrelated to Social Security, is to break the promise
of Social Security.
VA Disability Compensation Benefits: Veterans are generally
eligible for VA disability compensation benefits if they
become disabled due to injuries or illnesses sustained
during, or as a result of, military service. There were 3.2
million veterans receiving these benefits in 2010. A veteran
receiving VA disability compensation due to a service-
connected disability rated at 100 percent is currently
entitled to receive $33,288 a year. Under the chained CPI,
which is a cut in the formula traditionally used to determine
the COLA for VA benefits, a disabled veteran who started
receiving benefits at age 30 would have their benefits
reduced by $1,425 at age 45, $2,341 at age 55 and $3,231 at
age 65.
VA Pension Benefits: Veterans with low incomes who are
either permanently and totally disabled, or age 65 and older,
may be eligible for pension benefits if they served during a
period of war. More than 310,000 veterans received VA pension
benefits in 2010. The current benefit for a veteran is just
$12,256 a year. Under the chained CPI, VA pension benefits
for veterans aged 65 and older living in poverty would be
reduced by $353 at age 75, $696 at age 85 and $1,029 at age
95.
Social Security and veterans' benefits need to be based on
an accurate measure of inflation. The current COLA formula
understates the true cost-of-living increases faced by
seniors and people with disabilities because it does not take
into account their higher share of spending devoted to health
care, and that health care prices rise much more rapidly than
overall prices. Although veterans who have service-connected
disabilities and those receiving pension benefits are
eligible for VA health care, they may still be impacted by
rising out-of-pocket health care costs. Adopting the chained
CPI would make the situation worse.
Instead, Social Security and VA benefits should be based on
a formula that takes account of these higher health care
costs called the CPI-E (Experimental CPI for the Elderly)
developed by the Bureau of Labor Statistics. The CPI-E rises
at a slightly faster rate than the formula currently used to
calculate the COLA, and at a still faster rate than the
proposed chained CPI, providing a modestly more generous COLA
for seniors and people with disabilities.
We agree that political leaders need to restore fiscal
discipline, but we believe it should be done with great care
and without reneging on this country's promises to veterans,
including the promises of Social Security and VA disability
compensation and pension benefits--all of which are modest in
size. Many veterans who rely on these programs live on fixed
incomes and very tight budgets. For them, every dollar of
hard-earned benefits counts in meeting basic expenses,
attaining quality of life, and building a better future for
themselves and those who depend on them. For many of them,
reducing the annual COLA would mean real sacrifice. We ask
that you not do that for those who have already sacrificed so
much for this great country.
Thank you for your serious consideration of our views. We
look forward to working with you on this important matter.
Sincerely,
Air Force Sergeants Association; Air Force Women Officers
Associated; American Military Retirees Association; American
Military Society; Association of the United States Navy;
Blinded Veterans Association; Gold Star Wives; Iraq and
Afghanistan Veterans of America; Jewish War Veterans;
Military Officers Association of America; National
Association for Uniformed Services; National Guard
Association of the United States; National Military Family
Association; Paralyzed Veterans of America; Veterans for
Common Sense; Veterans of Foreign Wars; VetsFirst, a program
of United Spinal Association; Vietnam Veterans of America.
____
The American Legion,
Washington, DC, December 14, 2012.
Hon. Harry Reid,
Majority Leader, U.S. Senate,
Washington, DC.
Hon. John Boehner,
Speaker, House of Representatives,
Washington, DC.
Hon. Mitch McConnell,
Republican Leader, U.S. Senate,
Washington, DC.
Hon. Nancy Pelosi,
Democratic Leader, House of Representatives,
Washington, DC.
Dear Leader Reid, Leader McConnell, Speaker Boehner, and
Leader Pelosi: As efforts to address our nation's debt
continue, we understand many proposals and policies are being
reviewed. One proposal appears to be the changing of the
formula used to calculate the annual cost of living
adjustment (COLA) that affects Social Security and other
beneficiaries, including many veterans. On behalf of the 2.4
million members of The American Legion I voice our opposition
to this proposal because of the harmful effects it will have
on veterans' and Social Security benefits.
The Congressional Budget Office estimates adopting the
chained consumer price index (CPI) to calculate annual COLAs
could save the government $208 billion over ten years by
reducing payments of Social Security, disability, and other
benefits. More than half of this amount--$112 billion--would
come from Social Security cuts, which many veterans rely on
for both retirement and disability benefits. Another 11
percent of the savings--$24 billion--would come from
Department of Veterans Affairs (VA) benefits, civilian
pensions, and military retired pay. The American Legion
opposes the use of the chained CPI because using it would
have significant deleterious effects on the benefits millions
of veterans depend on in the following ways:
Social Security Retirement Benefits: Adopting the chained
CPI significantly reduces these benefits by changing the
manner in which COLAs are determined. Not only would a Social
Security COLA cut hurt veterans, their families, and their
survivors; it is misguided public policy. Social Security is
financed by the contributions of our members and their
employers. In effect, it belongs to its contributors. It is
separate from the rest of the budget. To use it to reduce the
federal deficit, which it did not cause,
[[Page S2086]]
breaks the promise of Social Security and it could have
harmful effects on the recruitment and retention of the Armed
Forces.
VA Service-connected Disability Compensation: Veterans are
eligible for VA service-connected disability compensation if
they become disabled due to injuries or illnesses incurred
during, or as a result of, military service. Under the
chained CPI, which cuts the formula used to determine the
COLA for VA benefits, disabled veterans who receive this
benefit would have their benefits reduced by thousands of
dollars over their remaining life times.
VA Pension Benefits: Veterans with low incomes who are
permanently and totally disabled, or are age 65 and older,
may be eligible for pension benefits if they served during a
period of war. Under the chained CPI, VA pension benefits for
veterans aged 65 and older living in poverty would be reduced
over their remaining life times.
Social Security and veterans' benefits do need to be based
on an accurate measure of inflation. The current COLA formula
already understates the true cost-of-living increases faced
by seniors and people with disabilities because it does not
take into account their higher share of spending devoted to
health care, and health care prices rise more rapidly than
overall prices. Even though veterans who have service-
connected disabilities and those receiving pension benefits
are eligible for VA health care, they will still be impacted
by rising out-of-pocket health care costs not covered by the
VA. Adopting the chained CPI would make their situations much
worse over time.
The American Legion understands the need to restore fiscal
discipline, but it should not be done by reneging on this
country's promises to its veterans who already have earned
these benefits through their service to country. For these
veterans and their families, reducing the current COLA
represents real sacrifice. We ask you not to do harm to those
who have already sacrificed so much for this great nation.
Thank you for your consideration. And thank you for what
you have done on behalf of the nation's servicemembers,
veterans, and their families and survivors.
Sincerely,
James E. `Jim' Koutz,
National Commander.
____
DAV,
Washington, DC, December 17, 2012.
Hon. Bernard Sanders,
U.S. Senate,
Dirksen Senate Office Building, Washington, DC.
Dear Senator Sanders: On behalf of the DAV, a national
veterans service organization with 1.2 million members, all
of whom are wartime disabled veterans, I write to express our
strongest opposition to any attempts by Congress to replace
the current consumer price index (CPI) formula used for
calculating the annual Social Security cost-of-living
adjustment (COLA) with the Bureau of Labor Statistics (BLS)
new formula commonly termed the ``chained CPI.'' As you know,
the Social Security COLA is applied annually to the rates for
VA disability compensation, dependency and indemnity
compensation, and pensions for wartime veterans and survivors
with limited incomes. Since the chained CPI is specifically
intended to lower the annual Social Security COLA, its
application would mean systematic reductions for millions of
veterans, their dependents and survivors who rely on VA
benefit payments.
In recent years, it has become apparent that even the
current COLA has failed to meet the rising costs faced by
disabled veterans, their dependents and survivors. These men
and women are not traditional consumers of goods and services
in the U.S. economy; they are significantly older and suffer
disabilities at higher rates than average citizens across the
age range of residents of this country. In general, they are
heavy consumers of health care, both within the VA and DOD
systems, from Medicare and Medicaid, and from private sector
providers. The sickest and most infirm among them are
unemployable. They are substantial consumers of prescription
medications and other health aids. In many cases, they live
on fixed incomes and some must subsist on a single source of
income: their monthly government disability or pension
payment. The current COLA does not even take into account the
rising costs of food or fuel. Lowering VA benefit payments
using a new formula designed to reduce federal spending at
large seems an unconscionable policy and would threaten their
financial security and must be rejected. In addition, we urge
you to examine whether there are better, more appropriate
indexes that recognize the uniqueness of this population's
needs and consumption patterns.
Furthermore, these millions of disabled veterans,
dependents and survivors suffer the additional indignity of
the novel ``rounding down'' policy Congress imposed in 1991
as a ``temporary'' means to lower the federal deficit in
fiscal year 1992 by reducing the annual COLA increase to the
next-lower dollar. Adding a chained CPI formula to this
reduction of benefits would serve to lower their standard of
living even more, an ironic reversal of the very purposes of
these payments.
On behalf of all disabled veterans and their families, we
stand with you in firm opposition to the application of the
chained CPI to disability and pension payments for veterans,
dependents and survivors of veterans. America's heroes
deserve better from a grateful and caring nation.
Sincerely,
Barry Jesinoski,
Executive Director
Washington Headquarters.
The PRESIDING OFFICER (Ms. Heitkamp). The Senator from Alabama.
Mr. SESSIONS. Madam President, I will be yielding to Senator Thune,
one of the experienced former members of the Budget Committee. He will
be sharing his thoughts. I would say to my colleagues, we have been
hearing that the Democratic plan is a balanced approach. It is
balanced, but it is not a balanced budget. What we need is a balanced
budget. That means the amount of money that comes in is the same as the
amount of money that goes out.
We can do that and increase spending every single year by 3.4
percent. This is very doable. It does not require the slashing of
spending on every important account that we care about in Washington.
That is what we are here for, and the administration, the Cabinet
Secretaries and so forth, they will make sure the limited amount of
money any government has is wisely spent. Therefore, we are not talking
about devastating cuts. We are talking about better management and
working with how to grow spending over the next 10 years--growing
spending over the next 10 years by 3.4 percent, not at 5.4 percent.
That balances the budget even under the assumption of 2.5 percent
inflation. It can be done. That is what the experts tell us, and that
is the best estimate we have today.
The motion to recommit the budget is now on the floor--recommit to
the committee, with instructions that they decide what to do to alter
it so that when it comes back it is balanced, a real balanced budget--
not a balanced plan, not a balanced approach, not some balanced
theory--but a real balanced budget. Presumably our colleagues think
balance is important because they have mentioned the word about 40
times. We have been counting them since we have been on the floor. I
think when we get to that vote we will be asking our colleagues: Do you
really want to achieve a balanced budget?
Senator Sanders said: We think you do not tax the rich enough. You
need to tax the rich more and more--as if taxing and punishing them
will fix the problem of growth in this economy that is truly too slow.
We are having the slowest recovery in our Nation's history, at least
since World War II. So we do not have a good recovery coming on. We
need to be talking about that.
But I guess my final statement is we do not need a balanced approach,
we need a balanced budget. There is a gulf of difference between the
two.
The plan before us today raises taxes $1 trillion. They claim it cuts
spending nearly $1 trillion and that it is a balanced approach: tax
increases, spending cuts, and deficit reduction. That is the message
that has been coming from the other side. Except it is not accurate.
This budget increases taxes by $1.5 trillion. It also increases
spending. That is what it does.
We are concerned about that. The net result is there is no change, it
seems to me--no change, a good analysis shows, in the debt course we
are on.
I see my colleague, Senator Thune. It is now time to yield to him. I
yield to Senator Thune.
The PRESIDING OFFICER. Will the Senator be yielding off the
resolution or off the motion?
Mr. SESSIONS. I thank the Chair. It will be yielding off the
resolution.
The PRESIDING OFFICER. The Senator from South Dakota.
Mr. THUNE. Madam President, I rise today along with my colleague from
Missouri, Senator Blunt, to offer a couple of amendments that have been
filed and that I hope we get an opportunity to vote on before this
process concludes. If you look at the base Democratic budget that has
been put before us, it has large tax increases in it; in fact, up to
$1.5 trillion in new taxes.
What we would attempt to do is to ensure that those taxes, higher
taxes, do not come by eliminating or capping the Federal tax deduction
for charitable giving. We have tens of millions of Americans mired in
poverty, and government budgets are more constrained than ever before
and what fills that gap is the charitable giving. It is the generosity
of people around this country who keep organizations going that are
providing these essential and basic functions for many Americans.
[[Page S2087]]
In fact, in 2011, Americans gave nearly $300 billion to support
charitable causes. This generosity not only helps to feed the hungry
and clothe the needy, it has a real budgetary impact because this is an
instance where the private sector is fulfilling a need that would
otherwise have to be met by government spending.
Unfortunately, as we know, the White House has proposed limiting the
value of itemized deductions for those earning above $200,000 for
singles, and $250,000 for married couples to 28 percent. Previous
estimates were that this proposal would reduce charitable donations by
up to $5.6 billion a year. As the Charitable Giving Coalition has
recently stated, that amounts to more than the annual budgets of the
Red Cross, Goodwill, YMCA, Habitat for Humanity, the Boys and Girls
Clubs, Catholic Charities, and the American Cancer Society combined.
But even this impact understates the degree to which charitable
giving could be harmed under the White House proposal because we now
have a new baseline with a higher top income tax rate. A new study by
the American Enterprise Institute estimates that the President's
itemized limitation under the new tax rates will lower total giving by
individuals by more than $9.4 billion per year.
We ought to be exploring new options to expand charitable giving
rather than limiting the charitable donations in order to fund higher
levels of government spending. If we are going to explore any changes
in the charitable deduction or any other tax provisions that we have in
the Tax Code today, it ought to be in the context of progrowth revenue-
neutral tax reform, not as a way to pay for higher spending, which is
what these proposals would do. I hope the vote on this amendment this
time around will be just as broadly bipartisan as the one I offered
back in 2009, where we got 94 votes in support.
The second amendment will put the Senate on record in support of
eliminating the destructive Federal estate tax, better known as the
death tax. That amendment I offer with the Senator from Missouri and
several others of my colleagues.
I have long believed the Federal estate tax is an unnecessary,
counterproductive, and inefficient tax. More important, the death tax
strikes many of us as not simply being bad tax policy but a policy that
runs counter to the very essence of the American free market system.
This is not a tax on rich fatcats, as some will claim. We already have
an income tax, and it is one of the most progressive income taxes in
the developed world.
The death tax is different. It is a tax on success, a tax on assets
that have been accumulated through a lifetime of hard work and
generated from income that was already taxed when it was earned. Many
of these businesses are ``land rich and cash poor,'' meaning that the
value of the business is in the land and in the business assets. These
businesses do not have substantial liquid assets sitting around to pay
a second layer of tax that is imposed when a loved one passes way. As a
result, the death tax often requires that business assets are sold
simply to pay the tax.
Consider South Dakota, where we have seen farmland prices increased
by over 50 percent in just the past 5 years. States such as Iowa,
Kansas, Missouri, Minnesota, and North Dakota have seen similar
increases.
Finally, my amendment will give farmers, ranchers, and family
business owners peace of mind, and it will do so in a deficit-neutral
way. When we voted on a sense-of-the-Senate to eliminate the death tax
in 2002, 11 Senate Democrats supported that, including a number of
Senators who are still in the Senate today. Much has changed since
2002, but I believe the death tax was a bad tax law then, and it
remains so today. I hope to get a strong bipartisan vote on this as
well.
Before I shift to my colleague from Missouri, I simply want to say,
as I have said before, that when we look at this budget process and the
budget proposal put before us by the Senate Democrats, the question we
ought to ask is, What does this do to promote economic growth? What
does this do to create jobs? More than anything else, what we need in
this country is increased economic growth. Increased economic growth
will get the people who are unemployed back to work, which will
increase the take-home pay of middle-class Americans.
We have seen a sluggish economy, chronic high unemployment, and a
massive amount of debt over the past 4 years. It is time to chart a
different course, and the way to do that is to put policies in place
that will encourage economic growth. A $1.5 trillion tax increase is
not the way to do that, and we certainly do not want to take away the
incentive people in this country have to continue to give out of the
generosity of their hearts to our charitable organizations all across
the country.
It is also important that once and for all we get rid of the death
tax, which is so punitive to people who work so hard and want to pass
that on to the next generation of Americans.
I am happy to yield to my colleague from Missouri, who, like me,
represents a lot of farmers, ranchers, and hard-working small
businesspeople for whom the tax issues are important. He will offer
comments on the impact of some of these tax policies and the impact
some of the budget proposals coming from the Senate Democrats would
have on the State of Missouri.
The PRESIDING OFFICER. The Senator from Missouri.
Mr. BLUNT. Madam President, I am glad to join Senator Thune in
proposing these two important amendments and also to join him on the
overall point on which we ought to be focused, which is economic
opportunity and economic growth.
How do we get people onto the pathway of more opportunity for them
and their families? Private sector job creation should be the No. 1
domestic goal of America today. Frankly, it should be the No. 1
domestic goal of everything we do.
When we are dealing with a budget or an appropriations bill that
deals with any kind of domestic policy, we ought to be thinking about
how this would impact private sector job creation. How does this impact
economic growth? How does this impact opportunity? What do we do to
change our society for the better and not the other way around?
Clearly, I think we all appreciate the fact that Americans are more
generous in giving to religious organizations and charities than
anybody else in the world. My belief is that there is no country that
comes anywhere close in charitable giving. It is not just the top
earners in America who give money to charitable organizations,
sometimes it is given by families who have to stretch the dollar to
make the contribution they want to make to their church that Sunday or
to make the contribution they want to make to the Girl Scouts or Boy
Scouts activities or the YMCA or YWCA in their community. Nobody does
this the way we do it.
I am proud to join Senator Thune as he works on these issues. We have
worked together for a long time, and Senator Thune has always been a
critical advocate for our charities as well as for families who work
hard and create a small business or a family farm or ranch so they are
able to pass it along to the next generation.
Let me first talk a little bit more about charities. The ability to
voluntarily come together and do things is provided in the first
amendment. It is not just an amendment that protects speech and
religion, but it protects association, it protects people who make
things happen in their community that otherwise would not happen.
Americans give like nobody else in the world. Every day our religious
institutions, charities, hospitals, museums, and others come together
to take private resources and meet a number of community needs which
are met in the best possible way by people who are doing that through a
charitable effort. They help to feed the hungry, care for the sick,
serve the poor, and contribute to all kinds of educational
institutions.
Americans help by undertaking critical research and giving money that
goes to either help operate or actually support museums and parks. This
is a small example of what Americans do because they give to charity,
which is often done better than government bureaucracies; it is
cheaper, more effective, more reasonable, and we need to do everything
we can to continue to do that.
[[Page S2088]]
In 2011 Americans gave nearly $300 billion to charitable causes, and
75 percent of that giving was done by individuals. Of the 41 million
American households who itemize on their taxes--where they can
specifically see what they did--86 percent of those households take
advantage of the charitable contribution as they calculate their taxes.
The vast majority of people don't give to charities for tax breaks. I
was the president of a southern baptist university for 4 years before I
came to Congress. Every university president I know knows a little bit
about raising money, and every one of them knows that not every
contributor is motivated by the Tax Code, but the Tax Code has an
impact on whether they meet their goals. However, some contributors are
concerned, and the size of that contribution matters as it relates to
how they can leverage, frankly, the Tax Code in a way that makes it
easier for them to give more to help take care of the things they care
about.
We want to be sure we are doing what we can as we try to grow the
economy, and an awful lot of our economy comes from the private sector.
About 1 out of 10 jobs is in the charitable sector--1 out of 10 jobs is
in the charitable sector. When we restrict that charitable sector, we
restrict people from doing what they would do otherwise.
Senator Thune mentioned $9 billion. Now, $9 billion of $300 billion,
does that sound like a lot? It sounds like a lot to the kid who got the
last scholarship. It sounds like a lot for the park that doesn't get
the new playground equipment because the local Kiwanis club could not
get to their goal so they could help their community. If we add
up charitable contributions that anyone here gives to, in all
likelihood, collectively it would amount to less than $9 billion. So of
course it makes a difference, and it is a difference in whether or not
they get there. The nonprofit sector employs 1 out of 10 U.S. workers
and provides almost 14 million jobs and paid almost $600 billion in
wages and benefits. It is about exactly the same in our State.
This is a part of who we are that we don't want to discourage. There
is a reason Americans give more generously to charitable causes than
anybody else in the world. Let's not walk away from that.
This amendment will ensure that the limits on charitable giving that
are in place in the budget of the majority don't go toward just more
government spending. If we want to have a discussion about how we might
cut tax rates and encourage the economy, that is one thing, but if the
discussion is to discourage people from giving to charities so there
will be more money for government to spend, I just say that is the
wrong discussion to have.
We should not increase government spending at the expense of
America's churches and charities. And, of course, the death tax, small
businesses, family farms, ranches have all paid taxes on everything
they have. Lots of times they pay taxes on everything they have, such
as the income tax and the annual property tax.
Everybody can think of 1 example, if not 100, of the family who works
side by side. Frankly, by the time parents leave this Earth, it is
really hard to determine who created the wealth. Was it Mom and Dad or
was it the son or daughter who was standing right there beside them in
the grocery store every day or working with them on the family farm or
ranch?
In our State of Missouri, we have more than 100,000 individual farms.
It is the second highest number of farms in America. We do not have the
biggest farms and ranches in America, but we have more of them than any
other State but for one. Those individuals and families have done what
they could to try to create opportunity and a livelihood, and they
would like to pass that along. What is wrong with that?
Clearly, the point we are at right now with the tax at the time of
death is better than it has been in a while--I suppose not better than
the 1 year there was no death tax. For 1 year we had no death tax, and
that is the ideal that government should try to achieve again.
I am pleased to join Senator Thune in this effort. I hope we will do
what we can to encourage families who have businesses that they can
pass along without having death as a taxable event. There are plenty of
taxable events in life without having death as a taxable event.
I again thank Senator Thune for his long advocacy of eliminating this
unfairness in our Tax Code. I have been glad to join him in debate
after debate over the years on this issue. Let's not move toward
thinking we are doing the right thing by doing the wrong thing as it
relates to family farms and business.
I also want to say as I conclude that I am going to be offering an
amendment on the carbon tax as well. We should not have a carbon tax
because the carbon tax that is anticipated in some of the language of
this budget raises utility bills. Who is impacted most by a higher
utility bill? It is the most vulnerable among us. It is the family who
is the last family to get the new refrigerator, it is the family who is
the last family to get the better insulated windows, it is the family
who is the last family to get more insulation in their ceiling. All of
the things we do that raise utility bills have a real impact on them
just like whenever we are doing anything that raises costs, such as
gasoline prices. The last person or family to get the fuel-efficient
car is the one who can least afford to see what happens to their
utility bill or their gasoline costs. I am opposed to this kind of tax
being passed along to people who have a hard enough time paying their
utility bill.
So whether it is the carbon tax or the death tax or a tax on
charitable giving, let's not do the wrong thing for the sake of more
government spending. Let's do the right thing for jobs and American
families.
I ask through the Chair if Senator Thune has anything he wants to say
in conclusion on these amendments.
Mr. THUNE. Madam President, I thank my colleague from Missouri. He
has a great deal of experience. As he said, we worked together on these
issues for a long time. We both recognize the importance of economic
growth. We see a budget put before us by the Senate Democrats that
grows the government and not the economy. We believe the focus should
be on growing the economy, not the government. The amendments we
offered have that thought in mind.
There are other colleagues who are here to speak to the basic budget
proposal the Democrats have put forward and talk about some of the
amendments they intend to offer.
Thank you.
Mr. SESSIONS. Madam President, I see we have Senator Vitter of
Louisiana ready to speak. I ask unanimous consent that their time be
taken off the budget resolution.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Louisiana.
Mr. VITTER. Madam President, I come to the floor on this budget
debate and will specifically highlight several amendments that I am
presenting that will be voted on in the context of the debate. We
address several provisions that I think are important as we vote on
moving forward with the budget.
One issue is a reform idea. It is very simple, but it is very basic,
and I think it is important in terms of our leading through these
fiscally tough times; that is, ending automatic pay raises for Members
of Congress. I am joined in this amendment by Senator McCaskill of
Missouri, and I thank her for her leadership. There is existing Federal
law that establishes automatic pay raises for Members of Congress. We
don't have to put in a bill, we don't have to debate the measure on the
floor, much less vote. I think that is offensive to the American
people, particularly in tough economic times such as these.
To Congress's credit, we have passed stopgap legislation to refuse
pay raises since 2009, but we need to go the next legitimate step. We
need to end all automatic pay raises and have the courage, if it is
ever justified over time with inflation, to put in a proposal, to
debate it, to vote on it, not to have automatic pay raises for Members
of Congress. I urge my colleagues to support this amendment.
A second amendment would require photographic IDs for voting in
Federal elections. This is largely provoked by the actions of the Obama
administration's Justice Department which has been fighting States that
are trying to institute photo IDs. That is allowed under Federal law,
and several States
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are doing that and doing it properly, including Texas and South
Carolina, but this Justice Department is trying to shut that down, even
though it is allowed by Federal law. Interestingly, that assault on
States trying to do their job, trying to do things properly, has been
made by the head of the Civil Rights Division at Justice, Thomas Perez,
who is now nominated for a Cabinet position--Labor Secretary. This
amendment and this proposal would clarify it by actually requiring
photo IDs for voting in Federal elections.
We require photo IDs for traveling in airports. We require photo IDs
for going into a conference. We require photo IDs for a myriad of
things, including visiting the White House. Surely it is a very
legitimate, simple requirement that doesn't disenfranchise anyone to
make sure the integrity of our election system is preserved. I urge my
colleagues to support this amendment.
Third, another amendment I will bring would finally require the US-
VISIT system to be properly and fully executed and put in place. The
US-VISIT system, as the Presiding Officer knows, is an entry and exit
control system to track foreign nationals who are properly visiting our
country with visas, so it tracks them as they come in and go out, and
if they don't go out in time, if they overstay their visa, it brings up
a red flag that is sent to law enforcement officials.
This is not a small matter because, as we all remember, the 9/11
terrorists overstayed their visas. A proper US-VISIT system would have
tracked that, would have caught them, would have done something about
it. There has been a crying need since at least 1996. In 1996, Congress
passed legislation that mandated the executive branch, within 2 years,
establish this sort of system. Of course, it wasn't done in time for 9/
11. After 9/11, the 9/11 Commission specifically went back and
recommended that we get on this, that we finish the work, that we fully
establish the US-VISIT system. It said:
The Department of Homeland Security, properly supported by
the Congress, should complete as quickly as possible a
biometric entry/exit screening system.
Yet, even now, over a decade after 9/11, 12 years after 9/11, we
don't have that system fully in place. We need that system, and this
amendment would not just mandate the system but it would say that the
Department of Homeland Security cannot grant legal status to those
illegally present within the United States until we all comply with
Federal law relating to the entry and exit data system required under
the law originally passed in 1996.
In the context of immigration reform, I don't think we should
consider granting legal status to those here illegally until we have
this US-VISIT system, which is an absolutely essential component of
enforcement.
A fourth amendment I have that we will be voting on over the next few
days is in support of the Prenatal Nondiscrimination Act. This
amendment would support that act and express the sense of the Senate
that Congress should enact it. What does that act do? It provides that
whoever knowingly performs an abortion that is sought based on sex or
gender selection would be guilty of violating the law. So it prohibits
discriminating against the unborn in the form of abortion sex
selection.
A lot of folks don't realize it, but, again, this is not a
theoretical issue. This, unfortunately, is an ongoing practice. There
are at least four studies from universities--not from ultraconservative
think tanks; UC-Berkeley is not a conservative think tank, University
of Connecticut, Columbia University--there are at least four studies
that found there is a strong son bias within certain American
communities, a bias toward having sons, not daughters. These studies
say that is ``clear evidence of sex-selection, most likely at the
prenatal stage.''
That is sort of academic speak. What does it mean? It means that
parents are selecting and using abortion to that outcome. It is always
selection against women, against girl babies, in favor of sons. That is
outrageous and it is tragic. We need to follow other countries that
have prohibited this practice.
Other countries--the United Kingdom, India, China--have enacted these
sorts of bans. The medical community, including the American Congress
of Obstetricians and Gynecologists, the American Society of
Reproductive Medicine, and the President's own Council on Bioethics,
have all condemned sex selection abortions.
In 2007, the United States even spearheaded a resolution to condemn
these sorts of sex selection abortions at the United Nations Commission
on the Status of Women. Yet we are doing nothing about it in this
country. So we should start doing something about this horrible
practice in this country. I urge all of my colleagues to support this
amendment.
Fifth and finally, I will have an amendment with regard to China,
India, and Russia, and greenhouse gas regulation. The amendment and the
idea are very simple. It creates a point of order against funding for
greenhouse gas regulations until the administration can certify that
China, India, and Russia are similarly implementing greenhouse gas
regulations to reduce their own emissions.
There are big disagreements and debates about global warming, climate
change, greenhouse gas regulation. I wish to forego all that and put it
to the side. No matter what one thinks about that--causes and effects,
trend lines, or lack of trend lines--one thing is perfectly clear and
beyond dispute; that is, whatever the United States does is irrelevant
if major players globally, such as China and India and Russia, don't do
the same. Clearly, our action is irrelevant unless all three of those
countries do the same. China has just surpassed the United States as
the world's largest producer of CO2. China now produces more
than the United States and Canada combined. India is now the world's
third largest offender of CO2, and Russia is fourth. So
unless these three countries adopt some sort of similar regime, our
actions do zero in terms of the environment. But our actions would do a
lot in terms of costing us jobs, killing jobs, and suppressing economic
growth.
This is a very commonsense regulation. It shouldn't matter what one
thinks about climate change with regard to how a Senator votes,
because, again, our actions will have zero effect if China, India, and
Russia are not taking similar action. I urge all of my colleagues to
support this important amendment.
Thank you, Madam President. I yield the floor.
The PRESIDING OFFICER. The Senator from Ohio.
Mr. PORTMAN. Madam President, I rise in support of Senator Sessions'
motion to recommit on a balanced budget. I think it is important that
we have a balanced plan before us, as we have talked about a lot today,
but that means balancing the budget, just as we ought to do in our
families and people have to do in their businesses. States all around
the country have to do it. Local governments have to do it.
Let's stop spending more than we take in. We can do it over time and
without making the kind of severe cuts that were alleged earlier. We
can do it by growing the economy and restraining spending. So I am
happy to stand in support of that.
I stand here because I am worried about where we are headed. Our debt
now is about $140,000 per household. Think about that. For all of the
folks watching today, on average, $140,000 is what every household in
America owes on this debt. This is now something that, in my view, can
put us in a perilous situation. Our economy is already weak and we have
this huge debt and deficit, which is something that worries me. I think
our country is in trouble.
The Democrats have a proposal. Their budget is before us now and this
is what we are talking about. It adds another $7 trillion to that debt.
It actually doesn't deal with our budget problems. In fact, it actually
makes them worse, which I will talk about soon.
Let me for a minute, if I could, talk about where we are. There is a
lot of discussion on the floor about, Gosh, we need to raise more
revenue and how this is not about spending; it is about taxes.
Republicans are saying, No, the problem is spending. Let me explain why
we are saying that. It is arithmetic. It is math. It is what the
numbers show.
This is from the Congressional Budget Office. This is the nonpartisan
group
[[Page S2090]]
here in Congress that tells us how much we are spending, how much
revenue we are bringing in, and then they make a projection. They did
this about 3 years ago. They said, Here is where we are heading as a
country. Here is where we are now. Tax revenue is the blue line and
spending is the red line. By their projections, by 2015, a couple of
years from now, we are going to be back up above the historical levels.
Historically, taxes have been about 18 percent of the economy, and
that is the way economists like to look at it: What is the percentage
of the economy? Revenue has been about 20 percent. So here is 18
percent and here is 20 percent. This has been the average.
What they are saying is, actually it gets up to just over 19 percent
in a couple of years, by 2015, and then stays up above the historical
average over the next decade. In fact, what they tell us is that over
the next decade we are going to have the second highest amount of
revenue that we have had in the history of our country except for one
other decade.
So when we say it is spending, that is the issue. It is because the
revenue which, as we know, impacts the economy--the more revenue we
take out of the economy the harder it is for the private sector to get
ahead and to create jobs. We are saying, by the projections of this
nonpartisan group, they are going to be slightly above the average.
The problem is spending. What they tell us is that in a few decades--
here is 2040--spending is going to get so high that there is no way to
catch up to it with taxes. We can't even do it under the income tax
system. It is impossible.
Why do we say spending is a problem? Because if we don't deal with
this issue, our kids and grandkids are not going to have the economic
future we hope for them. The prosperity of this country will go down
the drain because this spending level will make it impossible to create
prosperity. That is the issue before us today. Yet, again, we have a
budget before us that, unfortunately, doesn't address that issue. In
fact, I would argue that it makes it worse.
Some have said, Gosh, we ought to be increasing taxes $1 for every $1
of spending reductions. What I would say to that is pretty simple. This
line here is about 19 percent of the economy. That is the revenue line.
And that is very close to the historical spending line, which is about
20 percent. So let's take 19 percent as the revenue line. The
Democrats, who have talked today on the floor about $1 of revenue for
every $1 of spending cuts, what do they mean by that? Well, this is 39
percent up here, here is 19 percent. So if we take $1 from each as a
percent of the GDP, it would go to about this line here. Where is that?
Well, 19 and 39, it is about 29 percent. What does 29 percent mean?
That means we would have a government bigger than we have ever had in
the history of this country. Again, the average has been about 20
percent in this country. That means we would have to have huge tax
increases to get to balance. Nobody on this floor, Democrat or
Republican, is talking about tax increases of that magnitude.
Why? Because that would be about doubling the taxes in this country.
So everybody listening today would be looking at their taxes and
saying: My gosh, my taxes just went up by 100 percent. That is what
that would mean. It would mean the biggest government in the history of
our country, so the scope and the size of government would grow.
So when you hear ``1 to 1,'' I hope you will just think about it in
terms of what does this mean based on these projections that have been
given to us by this nonpartisan group. It means a different country. It
means a much bigger government. It means a much bigger burden of
taxation. It means we end up not looking like the entrepreneurial,
innovative America that has been on the cutting edge and has created
the greatest economy on the face of the Earth.
That is our concern. That is why we say we have to deal with the
spending. It is pretty simple. Again, it is really a question of math.
Mr. SESSIONS. Madam President, will the Senator yield for a question?
Mr. PORTMAN. I would be happy to yield.
Mr. SESSIONS. Senator Portman is such a valuable member of the Budget
Committee. He served as the Director of the Office of Management and
Budget. He knows how this situation works.
But that dotted line on the chart, it is just spending, isn't it? It
is spending as a percentage of the American economy. So in some sense
that surging upward line of spending is even worse than at first glance
it might appear.
Mr. PORTMAN. That is true. This chart is as a percent of the GDP. So,
look, we all want the economy to grow. Actually, they projected it will
grow under the Congressional Budget Office analysis. Even so, that
growth in the economy cannot keep up with this great surge in spending.
So other folks have said on the floor over the last 24 hours: Well,
gosh, let's go back to the Simpson-Bowles 3-to-1 ratio, where you have
$3 in spending cuts for every $1 of revenue. That is what Erskine
Bowles testified before the supercommittee on, that that was what their
revenue was, $1 of revenue for every $3 in spending cuts.
That is also not what this budget does, this underlying budget,
because it actually increases taxes dramatically. Even under their own
calculus, again, it is 1 to 1. We have looked at it. We think the tax
increase is between $1 trillion and $1.5 trillion in this budget. So it
is the biggest tax increase in the history of the country.
What does $1 trillion mean--or $1.5 trillion? Well, it means that you
are going to have to tax a lot of people other than rich people. I
would refer you to an economic expert on this, a guy named Gene
Sperling, who is down at the White House, who talks about these
economic issues a lot. Here is what Gene Sperling said about raising $1
trillion. He said you cannot do it without hurting middle-class
families. This is his quote:
[A] careful look at the math of these types of caps and
limits [on tax preferences] shows that, once one takes into
account the reality of their impact on the middle-class
families and on charitable donation, plausible limits raise
only a fraction of the $1 trillion or more some have
suggested.
It is just too much to raise without going to the folks who are
making less than $200,000 a year, less than $100,000, less than
$50,000. So I would just suggest today that we have a problem in this
country. It is a spending problem. Yes, we want to get the economy
moving, and that will create more revenue. But we have to address that
issue and, unfortunately, the budget before us does not do it.
In addition to having these huge tax increases--the biggest in the
history of our country--this budget also has huge spending. The
spending is actually an increase. When you wipe away the gimmicks that
are in the budget that they have proposed--and we have talked a lot
about OCO. That just means the spending in Afghanistan. They project
that all this spending is going to occur that nobody expects is going
to occur, so because it does not, they say, well, that is a savings.
Then you are going to be able to spend more to make up for that.
Well, we are going to spend some more in Afghanistan. We all
understand that. But we are not going to spend as much as the CBO
projects. So those savings are not real, unfortunately. That is in
their budget. That is a gimmick.
They also say: Let's do away with this so-called sequester. This is
the thing that the Budget Control Act put in place. The Budget Control
Act said: Let's find these savings of $1.2 trillion in spending. Yet in
this budget, they say: No, let's replace that. So you have to add that
as well because instead of $1.2 trillion, they are saying half of that
is going to be new taxes. So that is less spending cuts.
So when you add all that up, and when you wipe all that away, it
looks like the spending increases are about $900 billion over the next
decade. So despite all these problems, we are talking about a huge
spending increase.
Now, let's just talk for a second about what the spending increase is
on. Here is the debt chart I have in the Chamber that shows the debt
climbing to $24 trillion over the next 10 years, under the Murray
budget, under the Democratic budget we are talking about today. But
what is the problem? Well, we are starting to do more to get the
discretionary spending under control. That means the spending that
Congress appropriates every year.
But when you think about the budget as kind of a pie, 62 percent of
that
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budget--the biggest piece of that pie--is not spending that Congress
appropriates every year. Congress does not do it because it is on
autopilot. That is interest on the debt that you have to spend; and
then it is the very important, vital entitlement programs--Medicare,
Medicaid, Social Security--but that are not sustainable in their
current form.
By the way, everybody agrees with that. The President talks about it
publicly. Everybody talks about it privately. But the fact is, these
programs are incredibly important. We want to ensure that they can
continue into the future. That is why we need reform--to preserve and
protect them. Yet, unbelievably, this budget before us does absolutely
nothing there. In fact, when you add up the changes on the entitlement
programs over the next 10 years--which, again, is the biggest reason
for these huge spending increases; in fact, as a percent of GDP, it is
the only reason--all of the spending increases are because of those
entitlement programs and interest on the debt, all of them as a percent
of the GDP, all of them. Yet this budget does not touch it. In fact, it
slightly increases spending as compared to the CBO baseline, as
compared to what we are going to do anyway that the Congressional
Budget Office just told us about.
That, to me, is the most amazing part of the budget. It is the
responsible thing to do. Again, the President has talked about it.
Members of both parties acknowledge this. We have to deal with this
issue. If we do not, we are not going to be able to have these programs
going forward.
Under their budget, the disability fund in Social Security--and a lot
of people rely on disability--runs out of money in 2016.
Under their budget, the Medicare trust fund itself goes bankrupt in
2024.
Under their budget, Social Security's fund for senior citizens would
go bankrupt in 2033, to the point that under law--remember this is just
20 years from now--a 25-percent benefit cut would be put in place.
That is what this budget would lead to. So it is hard for me to take
it very seriously as a budget. It is, I guess, more of a political
document.
The final thing I will say is, if we do this, if we go down this path
of more spending next year, more spending the next year, huge increases
in spending and taxes over the next 10 years, we will not only have a
budget that is out of control--and, as I said earlier, risk us having a
meltdown in terms of our economy because of a potential crisis we could
have, like has happened in southern Europe; Greece is a country people
talk about--but think about what it does to our economy.
This huge overhang of debt and deficits everybody now acknowledges is
bad for the economy. Some people think it is worse than others think.
But if you look at these studies--the Rogoff-Reinhart study has been
talked about on the floor. I know that is the one that says, when you
get to the level we are at now, you lose about 1 million jobs per year.
Well, something is happening in our economy, and I think a lot of
it--the negative part of it--is because of this debt and deficit. We
are living through the worst economic recovery since the 1940s. All of
us are discouraged by it, Democrats and Republicans alike. The average
growth rate was less than 1 percent over the last 4 years, and that is
not acceptable to any of us. We have to deal with this issue because it
is the right thing to do for our kids and our grandkids, as we have
talked about, the right thing to do for these programs so they are
viable and their trust funds do not go insolvent, but also for today's
economy. If we do not deal with this issue we are not going to have
people taking the risk, making the investment.
There are companies making money out there. Do you know what they are
doing with it? They are keeping it on the sidelines because they are
afraid of this, because they see this coming. They are worried about
making the investments. That is how we are going to create the jobs.
Right now, in the weakest economy we have had in a long time--and the
worst economic recovery since the 1940s--we are looking at unemployment
numbers that are unacceptably high. We are looking at a place such as
Ohio where we have a struggle with manufacturing. We are trying to get
back on our feet. We are looking for economic growth again. We are not
going to get it unless we deal with this issue.
The Heritage Foundation has looked at this budget, and they have done
an analysis of it in terms of its impact on jobs, on the economy. They
have said the budget will result in losing 800,000 jobs in our country.
In my State of Ohio, they said we will lose 40,000 jobs. We cannot
afford to lose 40,000 more jobs.
The nonpartisan Congressional Budget Office--which I mentioned
earlier and is the group in Congress that advises us on the economy--
has said this new debt will reduce long-term economic growth and cost
jobs.
So, ultimately, this is about a choice. Do we want to expand
government or do we want to expand the economy? Do we want to create
the opportunity to get the private economy moving or do we want to grow
the size and scope of government?
We have a fundamental choice to make in this Chamber with regard to
this budget today. I am hopeful we will be able to amend the budget so
we can take out some of the taxes and the spending and the borrowing,
so that it is better for the economy. Even if we cannot prevail--and if
this budget passes over the next couple days here--I still hope, as a
Congress, working with the President, we can address this issue.
Once this budget debate is behind us on the floor, I hope we can sit
down as Republicans and Democrats alike, as Americans, acknowledging
that if we do not deal with spending, we cannot get this economy back
on track, acknowledging that trying to tax, spend, and borrow your way
to prosperity does not work. We tried it. We have seen the results.
We have also seen the opposite, over time, through the great history
of this country. The time-honored principles that have made us this
cutting-edge economy, that have made us the envy of the world, relied
on entrepreneurship, innovation, keeping taxes low, keeping government
spending under control, and encouraging the private sector to do what
they do best, which is, to create jobs. This is why I oppose this
budget. This is why I also support a better way, to bring back the jobs
and get our country back on track.
The PRESIDING OFFICER. The Republican whip.
Mr. CORNYN. Madam President, there has been a complete abdication of
fiscal responsibility in Congress, particularly in the Senate, for the
last 4 years, in that there has been no budget passed in this Senate
for that period of time. What better manifestation, what uglier
manifestation of that fiscal irresponsibility than the $16.5 trillion
in debt.
Another symptom of that problem is the fact that in addition to the
Senate not passing a budget for the last 4 years, in 4 out of the last
5 years, the President of the United States has missed the statutory
deadline on submitting his proposed budget to the Senate for
consideration and to the Congress.
Really, when we are talking about budgeting, the House is going to
pass a budget that limits the rate of growth of Federal spending from
5.4 percent to 3.4 percent. It limits the rate of growth. Now, most of
America would not call that a cut. But for some reason that is called a
cut in Washington. What I would call that is a limitation on the rate
of growth of Federal spending.
It is important we get the President's proposed budget, as required
by the law. The law requires the President to send his proposed budget
to the Congress by the first Monday in February. He has not done so,
and we have been advised that we probably will not even see the
President's proposed budget until our work here is done. I do not know
what the President could do that would render himself any more
irrelevant to this important process than not contribute his proposed
budget on a timely basis, as required by the law.
Because the President has not complied with the law, I am going to
offer an amendment to this budget resolution called the No Budget No
OMB Pay Act of 2013. OMB, of course, stands for the Office of
Management and Budget, the executive branch agency responsible for
preparing the President's proposed budget.
The No Budget No OMB Pay Act would prohibit paying the salaries of
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the Office of Management and Budget Director, the Deputy Director, and
the Deputy Director for Management for any period of time that the
President is late in meeting the statutory requirement to submit his
budget, as I said, by the first Monday in February.
I have also filed an amendment to the budget that would allow the
Senate to express its support for this legislation.
It is certainly progress that now, after 4 years, Senator Reid has
seen fit to bring a budget to the floor. That is his prerogative as the
majority leader, something we in the minority have no authority to do.
But it represents progress--some small progress--that Senator Reid has
finally decided to bring a budget to the floor and that the Senate is
now able to amend and debate that budget resolution.
As you have heard, the proposed budget that has come from the Budget
Committee, Senator Murray's budget, raises taxes by $1.5 trillion and
increases spending by 62 percent. What is worse, it actually fails to
balance within 10 years, which is the budget window.
Equally as unfortunate, for the first time in recent memory, is that
the Congress is acting before receiving the President's proposed
budget. According to the National Journal, this marks an unprecedented
break of 92 years of tradition in having the President make the first
move in the budget process.
This is called leadership.
Current law requires the President to send his budget by the first
Monday of February, which I have said. President Obama has ignored this
requirement. He has missed the deadline 4 out of 5 years he has been
President of the United States. This year he was required to issue the
budget proposal on February 4, but he missed the deadline once again.
While the Senate is acting this week, it has been 45 days since the
President has failed to live up to the legal commitment for the
President to submit his proposed budget. We all know nowhere else in
America, whether in private life, private business, or in local or
State government, can you fail to do your job and still be paid--only
here in Washington, DC.
We know it is important the President and the executive branch live
up to their responsibilities, just as it is important we do so
ourselves. If the Office of Management and Budget does not do its job
and produce a budget, its top official should not be paid.
Based on legislation we have already passed, both the legislative
branch and now, if my budget amendment passes and if Congress embraces
this requirement, both executive and legislative branches share
responsibility when it comes to the budget. Without us doing our jobs
and the President doing his job, spending will remain out of control.
We all deserve better and the American people deserve better. They
deserve the accountability which comes from the President fulfilling
his legal responsibilities under the law of the land.
I yield the floor.
The PRESIDING OFFICER (Ms. Warren). The Senator from Utah.
Mr. HATCH. Madam President, as the Senate continues to debate the
first budget resolution in more than 4 years, I am struck not only by
the things we know about the Democrats' budget but also the things we
don't know. For example, we know the budget would increase our debt by
nearly $7 trillion over 10 years and it would continue on an upward
trajectory thereafter. What we don't know is how, while amassing all
that debt, our Nation will be able to respond to unforeseeable crises
and emergencies in the future.
In addition, we know the budget does next to nothing to address our
runaway entitlement spending. What we don't know is how programs such
as Medicare, Medicaid, and Social Security would survive over the long
term if this budget were to be followed.
Finally, we know this budget includes as much as $1.5 trillion in new
taxes. What we don't know is where all that revenue will be coming
from. Last week before the budget was released I came to the floor to
speak about the rumors the Democratic budget would include
reconciliation instructions with regard to taxes. The concern I
expressed at that time was the budget would instruct the Finance
Committee to close so-called tax loopholes in order to raise revenue
and this would, in effect, end ongoing bipartisan efforts on tax
reform. As it turns out, my fears were not unfounded. Specifically this
budget instructs the Finance Committee to find nearly $1 trillion in
new revenues to pay for additional spending.
The deadline under these instructions would be October 1 of this
year. That clashes directly with the schedule Chairman Baucus and I
have set out for bipartisan tax reform deliberations in the Finance
Committee. This budget would instruct the committee to set aside those
reform efforts and, instead, comb through the Tax Code looking for new
revenues. In addition, this budget includes deficit-neutral reserve
funds and sequester replacement which total more than $500 billion.
According to the Budget Committee, this new spending would be paid for
by closing so-called tax loopholes for the wealthy and corporations.
In addition to the $1 trillion in reconciliation instructions, this
budget includes potential for another half trillion in new taxes. This
means up to $1.5 trillion in fresh taxes from this budget will be used
to expand our already bloated Federal Government.
The budget repeats the common refrain we hear from our friends on the
other side of the aisle that our Tax Code is so full of so-called
loopholes which benefit only the wealthy. According to their arguments,
these loopholes may be closed at any time to generate untold amounts of
revenue without affecting the middle class or our economy.
During last week's Budget Committee markup, the chairwoman claimed
they could hit their revenue target by ``closing loopholes and cutting
unfair spending in the Tax Code for those who need it the least.''
This statement is simply incorrect. First of all, a loophole is
something created by accident or carelessness which is then exploited.
When my colleagues talk about loopholes, they aren't talking about
backdoors created unintentionally or sneaky abuses of the Tax Code,
they are talking about tax expenditures, all of which were deliberately
placed into the Code for specific reasons. More often than not my
Democratic colleagues use the term ``loophole'' to describe items in
the Tax Code they don't like. This doesn't make the label any more
honest.
Earlier this week one of my friends on the other side of the aisle
took this rhetoric about loopholes up a notch. He described the Tax
Code as this treasure trove of special deals and earmarks for the rich
and well-connected. He went further by saying, We are at the place
where the lobbyists wield the sweet corporate tax deals. He blamed
Republicans for this, arguing we were responsible for the existence of
these so-called loopholes and earmarks.
Admittedly there are some narrow provisions in the Tax Code--too
many, if you ask me. There are supporters of these provisions on both
sides of the aisle. Let's be honest. There aren't any real loopholes in
the Tax Code, nor are there any earmarks. There are simply tax
expenditures. If you look at a list of the largest tax expenditures,
you will find a number of deductions and preferences which
disproportionately benefit the middle class, middle-income taxpayers.
That being the case, if my colleagues want to raise significant amounts
of revenue by eliminating tax expenditures, they will have to do so by
raising taxes on the middle class.
Look at this chart. If you look at this chart, you will see the
revenue targets in the Democratic budget. First up, there is $975
billion right near the reconciliation instructions to the Finance
Committee. Below that are additional revenues included in this budget.
As I have mentioned, all told, if you include the specified revenue
target for reconciliation and potential increases elsewhere, the budget
may include more than $1.5 trillion in tax increases. Look at this.
Next we have a list of all the tax increases Senate Democrats have
voted for over the last 2 years, including the elimination of tax
breaks for oil and gas companies, increased taxes for carried interest
and the so-called Buffett rule. All told, these tax hike proposals
could raise about $108.3 billion in new revenues. At the bottom we see
the difference between that number, the tax increases which Senate
Democrats have actually voted for and the potential tax hikes which are
included in the budget.
[[Page S2093]]
As I said, we can give the Democrats credit for having identified
about $108 billion in tax increases they support, but that would mean
there is as much as $1.4 trillion in unidentified tax increases in this
budget.
How would they reach their target? The budget doesn't spell it out.
It leaves more than enough room to speculate. For example, you might
simply think they would adopt the idea from President Obama's past
budgets to cap itemized deductions for higher income earners at 28
percent.
This seems unlikely for two reasons. First, to date very few
Democrats in the Senate have come out in favor of that proposal.
Indeed, it would impact things such as charitable contributions and
pension deferrals which most have been unwilling to change. Second, and
more important, according to the Joint Committee on Taxation, that
proposal would generate only about $423 billion in new revenues over 10
years, which would leave my colleagues about $1 trillion short of their
revenue goal. Still, I can't help but wonder if the tide has shifted
with regard to this proposal.
With the Senate budget staking so much on the elimination of so-
called loopholes, it will be interesting to see how many Democrats
shift positions and endorse the President's proposal, even though it
will not yield nearly enough revenue to reach the targets outlined in
this budget.
Staying in the world of capping itemized deductions, there is also
the proposal outlined by CBO in 2011 to cap all itemized deductions for
all taxpayers at 15 percent. This would effectively raise taxes on
every tax filer in every bracket who itemized their deductions. Make no
mistake. This would be a tax increase on the middle class, meaning it
would violate the promises made by President Obama and other Democrats
to protect the middle class from further tax increases.
However, it would also generate enough revenue to be in the
neighborhood of what the Democrats have outlined in their budget. All
told, this proposal would, according to CBO, raise about $1.2 trillion
in revenue over 10 years. Given the outlandish revenue proposal in the
budget, this idea, while punitive and damaging to the middle class,
can't be ruled out entirely.
I have another chart here which lists the top 10 tax expenditures
according to the Joint Committee on Taxation. These 10 items account
for 71 percent of what Democrats have called spending in the Tax Code.
What is No. 1 on this list? I will give you a hint. It is not
corporate jet depreciation or carried interest. No, it is the tax-free
treatment of employer-provided health care. Do you want to do away with
that?
What is No. 2 on the list? It is the tax-deferred benefit for retired
savings plans.
How about No. 3? It is the measure which provides relief against
double taxation on investments. I am referring to the reduced rate on
long-term capital gains and dividends. This rate went up recently. It
was raised by 59 percent in the fiscal cliff bill. Raising it even more
is a sure-fire recipe for job destruction and even slower economic
growth.
No. 4 is the deduction for State and local taxes.
No. 5 is the home mortgage interest deduction. Do you want to do away
with that?
No. 6 is the tax-free treatment of Medicare benefits.
So far I don't see a lot of expenditures aimed solely at benefiting
the wealthy. No, most of these provisions benefit a significant number
of middle-income taxpayers or earners.
Three of the four next items on the list are refundable, meaning the
person filing the return can receive a check even if they owe no income
tax. This is truly where there is spending in the Tax Code. These
provisions exclusively benefit lower and middle-income earners. They
are not available to those making over $200,000 a year.
The point is not simply there are a lot of popular tax expenditures.
I think people know that already. No, my point is, given the difference
between the revenue target in the Democrats' budget and the tax
increases they supported on the record, there is no telling how they
plan to actually raise their revenue. If they are serious about closing
so-called loopholes to the tune of over $1 trillion, this list is where
the real money is. If we are talking about raising that kind of revenue
by eliminating tax expenditures, we are necessarily talking about
provisions which benefit the middle class. It can't be raised through
eliminating tax breaks for oil companies. It can't be raised by
instituting the Buffett rule. It can't be raised even by eliminating
all itemized deductions for millionaires.
I am sure my colleagues will disagree with this assessment. However,
the burden is on them to show where I am wrong, and they can't.
This is their budget and their revenue target. If they want this
budget to be taken seriously, the Democrats should come out and state
specifically their plan for raising their $1.5 trillion in additional
revenue. You can't simply say: We want the Finance Committee to figure
out how to raise taxes by another $1 trillion to finance our spending
spree. That is irresponsible and, as I said, it poisons the well for
fundamental tax reform. You can't simply say: We want to turn off
almost half a trillion dollars of sequestration spending cuts, but we
won't say how we will pay for it. This is irresponsible and misleading
to the American public.
Finally, I wish to point out the budget would also mark a significant
shift in the position held by many Democrats with regard to corporate
taxes. The Obama administration has repeatedly expressed support for
approaching corporate tax reform in a revenue-neutral manner. Prominent
Democrats on the Finance Committee have also publicly expressed support
for revenue-neutral corporate tax reform in order to make America more
globally competitive.
However, the Democrats' budget states: Eliminating loopholes and
cutting unfair spending in the Tax Code for the biggest corporations
must be a significant element of a balanced and responsible deficit
reduction plan.
You cannot have it both ways. Revenue-neutral corporate tax reform
means paring back corporate tax expenditures and lowering the corporate
tax rate. Revenue-neutral corporate tax reform does not mean, and
cannot mean, eliminating tax expenditures which some Members don't like
because it polls well, and then using some or all of the resulting
revenue gain to further expand the government. This is not tax reform
of any kind, this is a tax hike pure and simple. I would be interested
to find out whether the Democrats who have publicly expressed support
for revenue-neutral tax reform will support this budget.
More generally, I wish to know where the Democrats stand on corporate
taxes. Do they want to raise them, or do they want to make American
companies more globally competitive? I hope it is the latter. You
cannot do both.
When you look at the tax provisions of the Senate budget, it is clear
it is nothing more than a political document.
I suspect my colleagues on the other side of the aisle know they
cannot hit their revenue targets without impacting the middle class. I
think they also know we can't do revenue-neutral corporate tax reform
and at the same time raise more tax revenue from the corporate sector.
I think they know that in real-world terms, the tax provisions of this
budget are several bridges too far. So in the end, I have to assume
there is a political calculation being made.
My colleagues apparently believe it makes good political sense to
talk about reducing the deficit on the backs of the wealthy and less
popular corporations rather than making difficult choices on spending.
The American people need a real blueprint for our Nation's fiscal
future, not more talking points. Once again, I urge my colleagues on
both sides of the aisle to reject this budget.
Now I wish to take just a few seconds to talk about one of the budget
amendments I expect will be discussed and considered on the floor. I
understand it is described as an amendment to ``establish a deficit
neutral reserve fund to allow States to collect sales and use taxes
already owed under State law.'' This amendment is intended to be a
proxy vote for a bill called the Marketplace Fairness Act.
I greatly appreciate the diligent efforts of the supporters of this
bill, including Senators Enzi and Alexander.
[[Page S2094]]
Clearly, a lot of work has gone into this legislation. However, over
the last few months, I have been on the floor several times to talk
about the importance of restoring regular order in the Senate. The
Marketplace Fairness Act has been referred to the Finance Committee.
Both Chairman Baucus and I have the view that legislation is more
properly considered within the context of the committee's current
bipartisan efforts on tax reform.
However one feels regarding this amendment, it is undeniable that the
Marketplace Fairness Act is controversial and that concerns about and
suggestions for the legislation have been raised by many stakeholders.
I have met with many people on both sides of the Marketplace Fairness
Act, including people from Utah, and have heard many concerns. I am not
here to take a position on the substance of this legislation, only to
note that it deserves to be fully debated in committee and I am
concerned this amendment might not allow those debates to occur.
For this reason, I intend to vote no on this amendment at this time.
What I have said is extremely important. It is not partisan. It is
pointing out these doggone problems with this bill, and I hope my
friends on the other side will start looking at things such as this.
Because we can play politics with these things all day long, but that
doesn't make it right and it doesn't make it so we can do what my
friends on the other side would like to do, which is raise revenue so
they can spend more.
It boggles my mind. We have to find some way of living within our
means in this country. If we don't, we are creating a new generation of
debtors--our children, our grandchildren, and in many cases--in my
case--great-grandchildren as well. It is the debtor generation now.
Every one of them owes well over $50,000 personally, and that is going
to go up exponentially if we don't watch what we are doing.
In fact, even if we do watch what we are doing, it is still going to
go up. But we have to do everything in our power to give them a future.
The debtor generation is all those who are less than 50 years of age
but especially our youth. We simply can't barter away their future
because we don't have the guts to stand up and do what is right.
I yield the floor.
Mr. SESSIONS. Madam President, I think we will proceed now to the
other side. Then there will be back and forth on the Internet Fairness
Act; is that correct?
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. Madam President, it is my understanding there are a
number of Senators who have come to talk on one of the provisions they
would like to offer. I think we will start with their side, with
Senator Enzi to be yielded to from their side.
If the Senator wants to yield time to him, I will then yield to a
Democrat.
Mr. SESSIONS. All right.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SESSIONS. For the information of my colleagues--and I guess this
will not be in concrete--I will recognize Senator Enzi for 10 minutes,
Senator Alexander for 10 minutes, and Senators Blunt and Ayotte for 5
minutes each.
Senator Enzi, I know, has worked hard on this legislation, and I
yield to him.
Mrs. MURRAY. Madam President, I note the time will come off the
resolution on this.
The PRESIDING OFFICER. That is correct.
The Senator from Wyoming.
Mr. ENZI. Madam President, I rise with Senators Durbin, Alexander,
and others to discuss an amendment I am filing to the fiscal year 2014
budget resolution. The amendment establishes the deficit-neutral
reserve fund that allows States to enforce State and local use tax laws
and to collect taxes already owed under State law on remote sales.
The amendment captures the bipartisan, bicameral--the House and
Senate--policy my colleagues and I are pursuing in S. 336, the
Marketplace Fairness Act. I did hear my colleague from Utah mention he
would like that to go through regular order. This does not preclude
regular order. This would not be a final determination for the bill,
but it would give us some kind of indication of the strength behind
this idea.
As a former small business owner, I believe it is important to level
the playing field for all retailers--in-store, catalogue, and online--
so an outdated rule for sales tax collection does not adversely impact
small businesses and Main Street retailers. The Supreme Court case
earlier encouraged Congress to solve this problem. Thousands of local
businesses are forced to do business at a competitive disadvantage
because they have to collect sales tax and use tax and remote sellers
do not, which in some States can mean a 5- to 10-percent price
advantage. We should not be subsidizing some taxpayers at the expense
of others.
Sales taxes go directly to State and local governments--that would be
counties and cities and towns--which bring in needed revenue for
maintaining our schools, fixing our roads, and supporting local law
enforcement. If Congress fails to authorize States to collect tax on
remote sales and electronic commerce continues to grow, we are
implicitly blessing a situation where States can be forced to raise
other taxes, such as income or property taxes, to offset the growing
loss of sales tax revenue. Do you want that to happen? I sure don't.
Now is the time for Congress to act. Many Americans do not realize
when they buy something online, order something from a catalogue from a
business outside their own State, they still owe State sales taxes. It
is just very difficult to comply with that. For over a decade, Congress
has been debating how best to allow States to collect sales taxes from
online retailers in a way that puts Main Street businesses on a level
playing field with online retailers.
On February 14, 2013, the bicameral, bipartisan Marketplace Fairness
Act was introduced to close the 20-year loophole that distorts the
American marketplace by picking winners and losers, by subsidizing some
businesses at the expense of other businesses, and subsidizing
taxpayers at the expense of other taxpayers. All businesses and their
retail sales and all consumers and their purchases should be treated
equally.
The bill also empowers States to make the decision themselves. If
they choose to collect already existing sales taxes on all purchases,
regardless of whether the sale was online or in-store, they can, but it
takes their action. If they want to keep things the way they are, it is
the State's choice.
The Marketplace Fairness Act does not tax Internet use, it does not
tax Internet services, and it does not raise taxes. It gives States the
right to collect what is owed by the purchasing individual.
I wish to provide some highlights of what the Marketplace Fairness
Act accomplishes. The bill gives States the right to decide to collect
or not to collect taxes that are already owed. The legislation would
simplify and streamline the country's more than 9,000 diverse sales tax
jurisdictions and provide two options by which States could begin
collecting sales taxes from online and catalogue purchases. The bill
also carves out small businesses so they are not adversely affected by
the new law by exempting businesses with less than $1 million in online
or out-of-State sales from collection requirements. This small business
exemption will protect small merchants and give new businesses time to
get started.
Do not let the critics get away with saying this kind of
simplification cannot be done. The different tax rates and
jurisdictions are no problem for today's software programs. As a former
mayor and State legislator, I strongly favor allowing States the
authority to require sales and use tax collection from retailers on all
sales if the State chooses to do so. We need to implement a plan that
will allow States to generate revenue using mechanisms already approved
by their local leaders. We need to allow States the ability to collect
the sales taxes they already require. If enacted, it would provide
approximately $23 billion in fiscal relief for the States for which
Congress does not have to find an offset. This would give States less
of an excuse to come knocking on the Federal door for handouts and will
reduce the problem of federally attached strings.
[[Page S2095]]
The Marketplace Fairness Act is about States rights and it is about
fairness. I strongly encourage my colleagues to vote for the Enzi-
Durbin amendment to support the goals of States rights and a level
playing field for all businesses.
I yield the floor and I reserve the remainder of my time.
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. Madam President, I yield 10 minutes to the Senator from
Illinois off the resolution.
The PRESIDING OFFICER. The Senator from Illinois.
Mr. DURBIN. Madam President, this is a photograph of a store in
Palatine, IL, called Soccer Plus. Bob Naughtrip opened this store and
sold sporting equipment in the suburbs of Chicago. He had a pretty good
business going, but then he ran into something called show-rooming.
That consists of people walking into a store and saying: I would like
to try on a pair of shoes or some equipment. They would find exactly
what they wanted, write down all the information, and then say: Thanks,
Bob, walk out the door and order it on the Internet, paying for it
without paying sales tax on their purchase. So every time Bob tried to
sell something and collect the sales tax in Illinois--which he was
required to collect--he was at a disadvantage from the people buying
over the Internet. Is that fair?
The Supreme Court said it was up to Congress to decide whether that
is fair. It is up to Congress to decide whether Internet sales should
be subject to State and local sales taxes. That is why we are here. To
my way of thinking, this is just a question of fundamental fairness. We
are not talking about imposing a new tax--not at all. We are talking
about existing taxes.
In my State of Illinois, incidentally, when I buy something on the
Internet, I have a legal obligation to pay sales tax on it, but it is
done voluntarily. Many times it is not collected when I make the
purchase. I do it on my State income tax return each year. Most people
don't do it at all, so the sales tax is never collected on the Internet
purchase.
The purpose of this bill is to allow States, if they wish--
voluntarily--to start having Internet retailers collect sales tax for
the sales that are made over the Internet to people living in their
State. This is voluntary, so the States can decide whether to do it. Is
this a new tax? No. In 46 States it is an existing tax. It is now going
to be collected as opposed to voluntarily adding it to an income tax
return by individuals.
So it is not a new tax, and it is certainly not a tax on the Internet
itself. It is just that happens to be the point of purchase. We have on
the floor my friend, Senator Baucus of Montana. He is from one of the
four States in our Nation that do not have a sales tax, and they, of
course, are concerned about this issue. Let me make it clear: Anyone
purchasing an item on the Internet in Montana is not going to have to
pay sales tax if Montana doesn't have a sales tax. The same will be
true for New Hampshire, as well as Delaware and Oregon--the four States
that have no sales tax. So we are not imposing a new sales tax on
Montana or any other State. Those that have the tax will be collecting
it under our bill.
How about the Internet retailers who will be covered by this? We
created an exemption, as Senator Enzi said. The exemption says they
have to have $1 million in sales on the Internet before they have to do
this--$1 million.
How many Internet retailers would that mean? We think about 1,000,
975 sell more than $1 million worth of goods each year on the Internet.
So about 1,000 retailers on the Internet would be collecting the sales
tax. They would look at my home address and they would assess the tax
that is owed.
Wait a minute. How will that be assessed when each and every Internet
retailer has to go through the burden of establishing this technology,
these computer programs? No. The burden is on the States to provide the
computer software for the Internet retailers, not at the expense of the
Internet retailers. So it is a simple process, and it is a fair
process.
Bob was a good businessman. He hired a lot of local people. He
collected sales tax and paid his property tax, and with that money they
built this road right out in front of his shop, they provided the
police and fire services and things that are part of civilization,
living in America. He paid the taxes on this, and he lost his business
because his competitors weren't collecting the taxes.
I find it interesting, though. I recently made a purchase on Amazon,
and they collected the sales tax from me in Illinois--which they can
do. Amazon supports our bill, incidentally. They delivered it, and I
believe they used the Postal Service this time, but sometimes they use
UPS and FedEx. Their trucks and delivery people use the streets of
Chicago and the streets of Springfield. They rely on the basic services
we all count on. So even the Internet sales are dependent on some basic
services that are going to be provided by a community.
I have heard so many speeches on the floor of the Senate about how
much we love and venerate and respect small businesspeople. We are told
that if this economy is going to get well and move forward, it is going
to be driven by small businesses expanding their employment. Well, I
believe that. I have seen it over and over again in Illinois and every
State I have visited. But if they are going to have a fighting chance
to compete, there ought to be a level playing field, as Senator Enzi
said. There ought to be a basic fairness here.
If Bob's business had to collect sales tax for sales to Illinois
residents, why wouldn't those who purchase over the Internet be under
the same obligation? That is what this says. It basically establishes
that responsibility.
Now, of course we have a lot of support for this--support from
Governors and mayors and business developers and, of course, small
businesses. So if people want to come to the floor and decide what side
they want to be on, I urge them to be on the side of the same small
businesses they have given speeches about over and over again.
I believe in these men and women. Many of them have gone into small
business and taken a lot of risks. They are the backbone of our
communities, there is no question about it. Time and time again, we go
to them to make sure they are going to build the economy and hire the
people whom we need in our local communities. So let's give them a
fighting chance. The marketplace fairness bill will do that.
Senator Enzi was on this bill before me, Senator Dorgan from North
Dakota before me, and when Senator Dorgan retired, I asked if I could
join him. But I thank the Senator from Wyoming for his leadership. As
you probably heard, Senator Enzi, before he came to the Senate, was a
small businessman himself, and so he knows this firsthand.
So let's stand for business and retailers across America and give
them a fighting chance. Let them be competitive. Let them continue to
hire and be good neighbors in our communities. And let's say to the
Internet retailers: We are glad you are doing well, but play by the
same rules and make sure there is a level playing field.
Madam President, I yield the floor.
The PRESIDING OFFICER. The Senator from Tennessee.
Mr. ALEXANDER. Madam President, if I might ask the Senator from
Missouri to go ahead of me, if that is agreeable with the Senator from
Washington.
The PRESIDING OFFICER. The Senator from Missouri.
Mr. BLUNT. Madam President, I thank my colleagues for recognizing me
to make a few comments.
I agree with everything that has been said. I believe this is the
fair thing to do. I think it is wrong for government to penalize some
businesses over others. I think it is wrong, frankly, to have laws on
the books that we know aren't being enforced. To have laws on the books
that you know create law violators is the wrong thing to do. And
frankly, in almost every State where--as Senator Durbin pointed out, in
his State and my State, which is next door to his State, you are
supposed to pay this tax. People just don't do it. I think last year in
Missouri we had about 300 people pay this tax in the entire State. I
would bet, more than the collective tax they paid, that more than 300
people bought something over the Internet in the State of Missouri last
year. So this is a tax that is on the books, it needs to be collected,
and we ought to
[[Page S2096]]
see what we can do to make that happen.
States that don't have a sales tax don't have to collect it. States
that don't want to participate don't have to participate. But with all
of the technology now available, with the $1 million exemption for
businesses that want to sell a few things over the Internet--or maybe
they want to sell everything over the Internet, they just don't sell
very much--I think the objections that are reasonable to this have been
more than met.
I saw in a publication just last week on this topic three pretty well
known conservatives, one talking about the Internet at its inception
when William F. Buckley said:
If the advantage of tax-free Internet commerce marginally
closes out local industry, reforms are required.
This was at a time when nobody was buying things over the Internet,
when it was just getting started, when we didn't want to have a unique
tax for the Internet. But in all of those discussions, I never heard a
serious discussion that if you are on the Internet, you should avoid
taxes that are required to be paid. And William F. Buckley at the time
was saying that whenever this becomes a problem, something should be
done about it, and that is what this bill would do.
One of my former colleagues when I was in the House, now the Governor
of Indiana, Mike Pence, said:
I don't think Congress should be in the business of picking
winners and losers. Inaction by Congress today results in a
system today that does pick winners and losers.
He is talking about this system.
Al Cardenas, the chairman of the American Conservative Union, said:
There is no more glaring example of misguided government
power that when taxes or regulations affect two similar
businesses completely differently. Over time, the company
that has to comply with a tax or a regulation will lose
market share to its competitor who is carved out from this
government interference.
That is what this is about.
I had a news conference on this in St. Louis a year or so ago, and as
soon as the camera was turned off, the person interviewing me said: You
know, one of my wife's friends has a wedding dress shop, and she sees
people come in all the time who are clearly there to try on a wedding
dress, get the number off the wedding dress, and order it on the
Internet. And if the only difference in the cost of that wedding
dress--I guess there are lots of variations but, say, 8 or 10 percent--
if the only difference is the sales tax, that is not a fair
competition.
And the person who went in the store to try on the wedding dress paid
their local property taxes, they helped pay for the police protection,
they helped pay for the sidewalk and the parking place, and then
ordered the wedding dress from somebody who had contributed to none of
that.
So I join my colleagues in saying this is the right thing to do. I
hope we can get it done. And frankly, if we don't get it done, the
States that say this tax needs to be voluntarily paid and know that is
not happening should just get that law off the books. Having a law on
the books that you know people violate is not the right thing to do.
Madam President, I would give back to Mr. Enzi or Mr. Alexander
whatever time I haven't used, and I look forward to hearing others talk
on this issue.
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. Madam President, I ask unanimous consent that the hour
for Senators Klobuchar and Coats now begin at 4:10 p.m.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mrs. MURRAY. Madam President, I yield 5 minutes to the chair of the
Finance Committee, Senator Baucus.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Madam President, I think this amendment is not yet ready.
It is premature. This is a very complicated question, and I think there
has been a lot of easy talk and a little bit of herd instinct here
that, gee, because most States are not sales tax States, therefore this
amendment should be adopted.
The fact that is this is an extremely complicated question. For
example, who is going to enforce this statute? Is the State of
California, for example, or the State of Massachusetts going to enforce
the noncollection of sales tax in another State? That is revolutionary.
I cannot think of an instance where this Congress has legislated that a
State can go into another State and enforce the taxation laws in that
second State or when a State has empowered the State court in one State
to go to another State and enforce the State taxation in that other
State. It has not happened. It is not only complicated, but it is
revolutionary. We have not done this before--nothing similar.
I understand the arguments of those who want to pass this. They make
some good points. I have said to Senator Durbin, Senator Enzi, and
others that we in the Finance Committee will very seriously take this
up as soon as we can and will probably in the context of tax reform.
Let me repeat. It raises lots of questions that have not been
addressed with respect to States rights; that is, the degree to which
authorities in one State or courts in one State are able to go to
another State and enforce State taxation issues.
Certainly, we have the full faith and credit clause in the
Constitution where if someone in California, for example, gets a court
order or wants to enforce a collection of tax in California, that could
not be overturned in another State. That is not this question. This
question is whether courts in other States and citizens in other States
can go to another State and force the court in that other State to
enforce that other State's taxation law. We are not talking about the
taxation law in California. We are talking about the other State
taxation laws. We have never done that, and I don't think it is wise to
start going down that road now.
Second, different States have different State taxation laws for
different reasons. Some States have income taxes. Some don't. Some have
sales taxes. Some don't. The State of Montana has decided no sales tax,
but we will have a significant income tax. Other States say no income
tax but a significant sales tax. That is their prerogative. That is how
they want to run their State.
What does this do? This basically will have the virtual effect over a
period of time of saying that all States have to have a sales tax--
forget your income tax--and beyond that, it has to be the same rate.
That is what is going to happen here over time if this is enacted into
law. You are telling States they have to have a sales tax even if they
don't want to. I don't think we want to do that, to say nothing of all
the potential complications revolving around different jurisdictions.
I know the authors of this bill say: Computers can take care of it
all. That is part of the problem. The computers get shut down, they get
hacked. It is not the panacea a lot of people talk about. This is
extremely complicated.
Sure, we have to have a full, complete hearing on this, and we should
and we will. The best thing to do right now is to have this amendment
withdrawn because otherwise there are going to be a lot of amendments
offered today, tomorrow, and tonight that are going to show all the
defects of this, and they are all going to pass, and that is going to
seriously undermine and be a poison pill for this bill that is pending
right now. So the best solution is to withdraw this amendment now.
Let's not try to solve this here in the Senate budget resolution but,
rather, it should be in the right forum in the right location, and that
is the Finance Committee, with big hearings, and we will work all this
out because there are very legitimate points to be made on both sides.
What bothers me is there is a lot of easy talk about how good this
is, how fair it is, and nobody has thought through all the unintended
consequences and all the problems that could arise, and I just started
to raise a few of them.
My friend from Oregon had a good thought. What about Canada? What
about direct sellers in Canada just across the border? They sell to the
United States. Do we have jurisdiction over Canada? I don't think so.
And I can see a burgeoning direct sales business and revenue to Canada,
as my friend from Oregon thought of. There are a lot of others that we
haven't
[[Page S2097]]
thought about because it has not become ripe. It has not become ripe
because we haven't had a direct hearing in a direct forum.
So I just say this is not a good idea. I understand the reasons why
some advocate it, but I might say this: If we assume Federal dollars--
because someone has to come up with asking Uncle Sam for Federal
dollars to enforce this question in another State. Do we want that? I
ask, who is the enforcer here? Is it another State? Is it Uncle Sam? I
don't know. That has not been thought through.
Therefore, I strongly urge that it not be adopted. Otherwise, we are
going to have a ton of amendments that are not going to be appreciated
by the supporters of this bill. If they pass, it will dramatically
weaken any momentum they think they are going to have. So discretion is
the better part of valor. Let's withdraw this, and let's consider this
calmly in the right forum.
Madam President, I yield the floor.
The PRESIDING OFFICER. The Senator from Tennessee.
Mr. ALEXANDER. Madam President, I thank the Senator from Montana for
his comments, since Senator Enzi has probably been considering this
bill his whole career. He came to the Senate nearly 18 years ago, and
he introduced it 14 years ago. So even by Senate standards, it has had
a good deal of calm deliberation.
We have also had a hearing in the Finance Committee, where the
distinguished chairman is in charge, and we have asked for a markup,
which we haven't had.
Mr. BAUCUS. You will get one.
Mr. ALEXANDER. I thank the chairman for his commitment to a markup. I
wonder if I might ask through the Chair when that would come.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Madam President, I can't guarantee a time. Nobody around
here can. But I think it is appropriate that this is an issue that
should come up in the context of tax reform, which the committee is
pressing very vigorously. We had a meeting today in the Finance
Committee on the first of many steps. Regrettably, Senator Enzi was
unable to make it. It was on tax reform. And that is the appropriate
forum for this to be brought.
Mr. ALEXANDER. Madam President, I think this illustrates the problem
we are having. How can this be a part of tax reform when it is not part
of the Tax Code? It has been heard by the Commerce Committee in the
Senate. It has been heard by the Finance Committee. It has not been
marked up. It has been heard by the House Judiciary Committee. Senator
Enzi has been working on it for 14 years.
This is a very simple question. It is a matter of States rights, two
words. Does a State, any State, have the right to decide whether to
collect existing taxes from some of the people who owe the taxes or
from all of the people who owe the taxes?
In the State of Tennessee, at the Nashville Boot Company store, I
walk in, I try on a pair of boots, then I go order it over the Internet
so I do not have to pay the sales tax. What the State of Tennessee
wants to do--the conservative Governor Bill Haslam, the conservative
Lieutenant Governor Ron Ramsey, the Republican legislature, these are
not a bunch of big tax people--they want to collect the sales tax from
everybody who owes it and they would like to require those who sell
into Tennessee to do the very same thing they do, what the Nashville
Boot Company does when I buy from it: They add the sales tax to the
bill. They collect it and send it to the State. How hard is that to do?
My wife gave me an ice cream maker for my birthday last year. I
ordered some ingredients to make chocolate ice cream, over the
Internet. When I did that they added to my bill the sales tax based on
my ZIP Code. It is as easy as looking up the weather on your computer.
That is all we are deciding here. We are only deciding whether we in
the Congress are going to make State governments in our constitutional
framework play Mother May I, by coming and pleading with us to allow
the State to decide what to do about its own taxes. The State of
Tennessee wishes to reduce its tax rate. It wishes to avoid a State
income tax. It doesn't like the idea of treating one taxpayer one way
and another one another way; and one business one way and another
business another way. It wants to make that decision for itself.
When I was the Governor of Tennessee, nothing made me more unhappy
than to look up at Washington and see people of my own political party
come up here and think since they had taken an airplane to Washington,
they had gotten smarter than I was, suddenly, just by an hour plane
ride, and they were going to tell me what to do.
Now we have an honor roll of conservatives, and I will just speak to
the conservatives on my side for a while, who said we do not think
States ought to be playing Mother May I to the Federal Government on
this question. Give State legislatures the power to make these
decisions for themselves. That is consistent with the tenth amendment.
That is consistent with our constitutional framework. And most of them
are saying, as ours is in Tennessee: If you give us this power, the
right to do it, which the Supreme Court has said you clearly have the
right to do it--you, Congress, are the most qualified to do it. You can
make this decision. Give us this power and we will lower our tax rate.
That is what our State wants to do.
It might use the money another way. They might use it to pay
outstanding teachers more, to lower the tuition rate. But States have
the right to be right, and States have the right to be wrong.
There was a Supreme Court case 20 years ago at a time when most
Senators didn't even know there was an Internet. The Court did say that
States could not impose a burden on interstate commerce. But it said
Congress could write the rules for doing that. Now it is about as easy
to add the sales tax if you are buying from a catalog or buying over
the Internet as it is if you buy from a local store. There is no reason
for us to take the position that only we know best about how States
should make decisions about their services or their taxes.
Some are worried that this might increase taxes. I have said most
Governors think they will lower tax rates. But here is the honor roll
of conservatives who are asking the Congress to reaffirm our commitment
and understanding of our constitutional system which allows States to
make this decision: Al Cardenas, chairman of the American Conservative
Union; Governor Bob McDonnell, Virginia; Governor Tom Corbett,
Pennsylvania; Governor Bill Haslam, Tennessee; Governor Chris Christie,
New Jersey; Governor Rick Snyder, Michigan; Governor Butch Otter,
Idaho; Governor Mitch Daniels, Indiana; former Governor Jeb Bush,
Florida; former Governor Haley Barbour; the writings of the late
William F. Buckley, et cetera, et cetera.
It is time after 20 years to take this simple 11-page bill that says
States have the right to decide for themselves whether to collect an
existing tax from some of the people who owe it or from all the people
who owe it, by requiring the seller to collect the tax at the time of
the sale: same tax, same store. They ought to be able to do that.
Finally, I ask unanimous consent to have printed in the Record
following my remarks the comments of a number of conservative
supporters of the Marketplace Fairness Act.
In our State of Tennessee this bill is an insurance policy against a
State income tax. We don't have one. We don't want one.
It is also an opportunity for us to treat every taxpayer the same
way. If you owe the tax, it is collected at the time of sale and you
pay it, you don't avoid it. It is also a chance to treat all of the
businesses that sell into Tennessee the same way. If you are going to
sell to our 6 million people, we are going to treat you the same way we
treat people in the State. We don't want to create an incentive for
people to move out of Tennessee in order to sell into Tennessee. We
want there to be a level playing field.
If Montana businesses do not want to sell in Tennessee, that is their
prerogative. But if they do, we want to treat them in the same way we
treat all the other businesses in Tennessee. Let's make it very clear:
This is not a tax on the Internet. We have a Federal law that placed a
moratorium on Internet access taxes. Let me repeat that. We have a
Federal law that is an existing moratorium on taxing the Internet.
[[Page S2098]]
This is a question about whether the State of Idaho, the State of
Wyoming, the State of Tennessee, the State of Massachusetts, or any
other State, that may say if we are going to have a sales tax then we
are going to collect it in the same way from all the people who sell to
the people in our State. That is infinitely logical. With the advent of
technology it is about as easy to collect it one way as the other. And
it is fair.
I congratulate Senator Enzi and Senator Durbin for their years of
work. I appreciate very much the commitment of the chairman of the
Finance Committee to say there will be a markup. I think it is
absolutely wrong to think of it as part of tax reform since it is not
part of the Tax Code. We might include a milk producers bill in tax
reform as well by the Chairman's logic. They do not belong in the same
place. This bill boils down to two words: It is a States rights bill.
Do we have a tenth amendment, or the spirit of a tenth amendment, or do
we not? Do we trust Governors and legislatures to make decisions, or do
we not? Then they can decide whether they want to raise or lower taxes,
whether they want to collect taxes from some of the people who owe it
or from all the people who owe it. That is the issue, these two words:
States rights. I think this issue is perfectly appropriate to bring up
after 14 years of work by Senator Enzi, after hearing from the Senate
Finance and Commerce Committee and the House Judiciary Committee. This
is an opportunity for us to express our support for this principle of
States rights and to give Governors and legislatures across the country
a chance to treat businesses and taxpayers in the same way--stop
picking winners and stop picking losers.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Conservatives Support E-Fairness
William F. Buckley, Editor At Large, National Review: ``If
the advantage of tax-free Internet commerce marginally closes
out local industry, reforms are required... The mattress
maker in Connecticut is willing to compete with the company
in Massachusetts, but does not like it if out-of-state
businesses are, in practical terms, subsidized; that's what
the non-tax amounts to. Local concerns are complaining about
traffic in mattresses and books and records and computer
equipment which, ordered through the Internet, come in, so to
speak, duty free.'' (William F. Buckley, ``Get That Internet
Tax Right,'' National Review Online, 10/19/01)
Al Cardenas, Chairman, American Conservative Union (ACU):
``A robust free-market system requires a level playing field,
where the government doesn't get to pick winners and losers
in the marketplace. Senator Enzi and Congressman Womack
deserve praise for their efforts to empower states to make
their own revenue policy choices and create a fair system of
tax collection. The number one threat to the future of
American competitiveness isn't other countries--it's our tax
law. When it comes to state sales taxes, it is time to
address the area where federally mandated prejudice is most
egregious--the policy towards Internet sales, the decades-old
inequity between online sales and in-person sales as outdated
and unfair.'' (``Statement from ACU Chairman Al Cardenas
Applauding Efforts to Address Marketplace Fairness,'' Press
Release, 2/14/13)
Hanns Kuttner, Hudson Institute: ``Current policy gives
remote sellers a price advantage, allowing them to sell their
goods and services without collecting the sales tax owed by
the purchaser. This price difference functions like a
subsidy. It distorts the allocation between the two forms of
selling. The subsidy from not collecting tax due means a
larger share of sales will take place remotely than would
occur in a free, undistorted market.'' (Hans Kuttner,
``Future Marketplace: Free and Fair,'' May 2012.)
Iowa Governor Terry Branstad: ``Gov. Terry Branstad of Iowa
this week became the latest in a string of top Republican
state officials to back federal legislation giving states
more freedom to collect online sales taxes. Branstad's letter
of support, obtained exclusively by The Hill, comes not long
after another prominent Republican governor, Chris Christie
of New Jersey, also urged Congress to get moving on sales tax
legislation . . . In a letter sent Thursday, Branstad
encouraged his home-state senators to support a solution that
he said would close a longstanding loophole. `I understand
that the coalition supporting this legislation is now very
broad which gives me hope that, under your leadership, this
legislation can be passed yet this year,' Branstad wrote to
Sens. Chuck Grassley (R) and Tom Harkin (D). `The Internet is
now a robust, mature and dynamic marketplace that does not
warrant special protections,' he added. `The application of
sales taxes only to `brick-and-mortar' retailers, many of
which are small businesses, puts those very entities at a
competitive disadvantage.' '' (Bernie Becker & Kevin
Bogardus, ``GOP Governors Bolster Sales Tax Push,'' The Hill,
6/10/12)
New Jersey Governor Chris Christie: Governor Chris
Christie: ``I just want to make clear that I have been
working on this issue in my role on the executive committee
of the National Governors Association because it is an
important issue to all the nation's governors. And I too--
along with governors like Governor Daniels and others--urge
the federal government and the Congress in particular to get
behind Senator Lamar Alexander's legislation to allow states
to be able to make these choices for themselves. And I think
Senator Alexander's legislation would be a great step forward
in that regard. It would give states options to decide how
they want to deal with this and not have to any longer deal
with the federal prohibition on dealing with it. So, it would
allow us to do it in a much more uniform and broader way. So,
I'm with Governor Daniels on this and other Republican
governors--Governor Snyder of Michigan and others who feel
strongly about it. And we've been working on it at the
National Governors Association and I know we will continue to
and hope to get some type of resolution to it by the end of
this year.'' (Press Conference, Governor Chris Christie, 5/
31/12)
Michigan Governor Rick Snyder: `Technology currently exists
to quickly and effectively calculate taxes due on sales and
can be easily be integrated into online retailers'
operations,' wrote Snyder, a onetime venture capitalist and
former executive at the computer company Gateway. `It is time
for Congress to grant states the authority to enforce sales
tax and use laws on all retailers doing business in their
state.' (Bernie Becker, ``Michigan Governor Joins Online
Sales Tax Chorus,'' The Hill, 5/11/12)
Alabama Governor Robert Bentley: ``Alabama's Republican
governor has urged lawmakers from his state to support online
sales tax legislation, adding to the growing roster of GOP
officials who are on board with the idea. Gov. Robert Bentley
told Alabama's two senators and seven House members the
online sales tax bills would improve the state's fiscal
situation, and stressed that the legislation would not create
a new tax. `The bills will give Alabama the authority to
collect sales taxes--as we currently do from local brick-and-
mortar retailers--that are already owed from online
retailers,' Bentley wrote in a letter dated April 19.
`Allowing us to effectively close this sales tax loophole
would help both our state's finances and our state's small
businesses.' '' (Bernie Becker, ``Alabama Governor Gets
Behind Online Sales Tax Push,'' The Hill, 4/25/12)
Nevada Governor Brian Sandoval: `` `The only way to
completely resolve this issue is for Congress to enact
legislation that, within a simplified nationwide framework,
grants states the right to require collection by all
sellers,' Sandoval said in a statement.'' (Ed Vogel, ``Gov.
Sandoval Reaches Sales Tax Deal With Amazon,'' Las Vegas
Review-Journal, 4/24/12)
Maine Governor Paul LePage: ``Last week, Gov. Paul LePage,
R-Maine, wrote his state's two U.S. senators, Republicans
Susan Collins and Olympia Snowe, to urge them to back
legislation introduced by Sens. Mike Enzi, R-Wyo., Dick
Durbin, D-Ill., and Lamar Alexander, R-Tenn., that would
close a loophole left by a 1992 Supreme Court decision. The
high court ruled that states can't require retailers such as
catalog and now online retailers to collect sales taxes from
customers in states where those companies have no physical
presence. `There's no denying that passing the bill would
give thousands of small Maine businesses a real boost,'
LePage wrote. `Through no fault of their own, federal policy
now gives some out-of-state corporations an unfair advantage
over other Maine retailers.' '' (Juliana Gruenwald, ``Tea
Party Governor Is Backing Net Sales Tax Bill,'' National
Journal, 3/20/12)
Virginia Governor Bob McDonnell: `` `This bill helps to
ensure that online retailers with a physical presence in
Virginia are treated the same as traditional brick and-mortar
retailers who are already required to collect and remit
existing sales taxes on goods sold in the commonwealth.' ''
(Press Release, ``Governor McDonnell Announces Agreement
Reached On Tax Fairness Bill,'' Governor Bob McDonnell, 2/22/
12)
Idaho Governor C.L. ``Butch'' Otter: ``Gov. C. L. `Butch'
Otter backs taxing Internet sales to level the playing field
between virtual businesses and brick-and mortar
establishments on Idaho's Main Street. Otter made the remarks
to Idaho chamber of commerce leaders meeting in Boise on
Monday.'' (``Idaho Governor Supports Internet Sales Tax,''
The Associated Press, 1/30/12)
Indiana Governor Mitch Daniels: ``[S]ales taxes that
[states] impose ought to be paid, and paid by everybody
equally and collected by everybody in the retail business ...
We're not talking about an additional or new tax here--we're
talking about the collection of a tax that's existed a long
time.'' (Jeremy Hobson, ``Indiana Makes A Deal With Amazon On
Sales Taxes,'' Marketplace Business, 1/12/12)
Georgia Governor Nathan Deal: ``Gov. Nathan Deal is
considering extending the state sales tax to online
purchases, he told newspaper publishers Thursday morning . .
. `In the absence of congressional activity on that . . . I
think there will be some appetite to act on that in the
legislature,' he said.'' (Walter C. Jones, ``Ga. Considers
Online Sales Tax,'' The Augusta Chronicle, 1/12/12)
Indiana Governor and former Representative Mike Pence: ``I
don't think Congress should be in the business of picking
winners
[[Page S2099]]
and losers. Inaction by Congress today results in a system
today that does pick winners and losers.'' (House Judiciary
Committee, Hearing On ``Constitutional Limitations On States'
Authority To Collect Sales Taxes In E-Commerce,'' 11/30/11)
Former Mississippi Governor Haley Barbour: ``. . . [E]-
commerce has grown, and there is simply no longer a
compelling reason for government to continue giving online
retailers special treatment over small businesses who reside
on the Main Streets across Mississippi and the country. The
time to level the playing field is now. . .'' (Letter To
Sens. Enzi And Alexander Endorsing S. 1832, The Marketplace
Fairness Act, 11/29/11)
Tennessee Governor Bill Haslam: ``The National Governors
Association applauds your efforts to level the playing field
between Main Street retailers and online sellers by
introducing S. 1832, the `Marketplace Fairness Act.' This
common sense approach will allow states to collect the taxes
they are owed, help businesses comply with different state
laws, and provide fair competition between retailers that
will benefit consumers.'' (National Governors Association
Letter To Sens. Durbin, Enzi, Tim Johnson And Alexander
Endorsing S. 1832, The Marketplace Fairness Act, 11 /28/11)
South Carolina Governor Nikki Haley: `` `And I will tell
you regardless of what happens with Amazon, we want them. I
have told them we want you to do business in this state, but
we want you to do it on a level playing field. They got free
property, they got tax incentives, they got plenty of things.
Don't ask us to give you sales tax relief when we're not
giving it to the book store down the street or we're not
giving it to the other stores on the other side of town, it's
just not a level playing field.'' ' (Press Conference,
Governor Nikki Haley, 4/28/11)
South Dakota Governor Dennis Daugaard: ``On March 11, South
Dakota enacted S.B. 146, sales tax legislation that requires
out-of-state retailers that sell to in-state residents to
notify their customers of their personal use tax obligation.
Under the law, online sellers are required to provide clear
notice to consumers during the checkout process that a South
Dakota use tax is due.'' (Rosemary Hawkins, ``Sales Tax Bills
Pass In Arkansas And South Dakota,'' American Booksellers
Association, 3/3/11)
Former Florida Governor Jeb Bush: ``It seems to me there
has to be a way to tax sales done online in the same way that
sales are taxed in brick and mortar establishments. My guess
is that there would be hundreds of millions of dollars that
then could be used to reduce taxes to fulfill campaign
promises.'' (Letter To Florida Governor Rick Scott, 1/2/11)
____
March 19, 2013.
Dear Senator: The undersigned companies and state and
national trade associations respectfully request that you
vote yes on a proposed amendment to the fiscal year 2014
Senate Budget Resolution to implement S. 336, the Marketplace
Fairness Act. The Marketplace Fairness Act would level the
playing field for all sellers while assisting the states in
collecting approximately $23 billion in uncollected state
sales and use taxes that are currently due on Internet and
other remote sales. The bill was introduced by a strong bi-
partisan group of Senators, led by Senators Enzi, Alexander,
Heitkamp and Durbin--to address the inequality in today's
marketplace.
At issue is a decades-old Supreme Court ruling, issued in
1992 before the pervasiveness of Internet commerce, which
prohibits states from requiring remote sellers to collect
sales and use taxes owed on purchases from out-of-state
vendors. This has created an unfair price disadvantage for
brick-and-mortar businesses, has led to budget shortfalls for
states as sales and use taxes go uncollected, and has placed
an undue burden on consumers who do not realize they owe the
sales/use tax if it is not collected by the seller, leaving
them to face penalties and increased scrutiny from state
auditors.
We support the Marketplace Fairness Act because it would
give states the authority to manage their sales tax laws
while addressing this issue. Only Congress can grant this
authority to the states. S. 336 represents the best thinking
of all the stakeholders and provides a pathway forward for
states to collect sales and use taxes, simplify their tax
statutes, and assist vendors with compliance, while providing
for a robust $1 million small business exemption.
As the Congress seeks solutions to address the federal
budget and the impacts of sequestration, the Marketplace
Fairness Act is a proposal that will help states facing their
own budget shortfalls without increasing the federal deficit.
Congress has an opportunity to enhance states' rights over
sales and use tax collection authority and in the process
level the playing field for all merchants. Please support the
budget amendment on S. 336, the Marketplace Fairness Act,
because the time has come to update our local and state tax
laws.
Respectfully,
NATIONAL TRADE ASSOCIATIONS
American Apparel and Footwear Association
American Booksellers Association
American Farm Bureau Federation
American Independent Business Alliance
American Specialty Toy Retailing Association
American Veterinary Medical Association
Association for Christian Retail
California Association of College Store
Campus Stores of New England
Certified Commercial Investment Member Institute
College Stores Association of North Carolina
Consumer Electronics Association
Consumer Electronics Retailers Association
Food Marketing Institute
Heating, Air-Conditioning and Refrigeration Distributors
International (HARDI)
Independent Running Retailer Association
Institute of Real Management
International Council of Shopping Centers
International Downtown Association
International Economic Development Council
Jewelers of America
Middle Atlantic College Stores
NAIOP, Commercial Real Estate Development Association
NAMM, National Association of Music Merchants
National Association of Chain Drug Stores
National Association of College Stores
National Association of Electrical Distributors
National Association of Real Estate Investment Trusts
National Association of Realtors
National School Supply & Equipment Association
National Association of Wholesaler-Distributors
National Bicycle Dealers Association
National Grocers Association
National Home Furnishings Association
National Retail Federation
National Sporting Goods Association
North American Retail Dealers Association
Outdoor Industry Association (O1A)
Pet Industry Joint Advisory Council
Professional Beauty Association
Real Estate Roundtable
Realtors Land Institute
Retail Industry Leaders Association
Soccer Dealer Association
Society of Industrial and Office Realtors
Southwest Association of College Bookstores
Tri-State Bookstore Association
World Floor Covering Association
STATE/LOCAL TRADE ASSOCIATIONS
Alabama College Bookstore Association
Alabama Retail Association
Alaska Veterinary Medical Association
Alliance of Wisconsin Retailers
Arizona Retailers Association
Arkansas Grocers and Retail Merchants Association
Association of Washington Business
California Business Properties Association
California Retailers Association
California Veterinary Medical Association
Campus Stores of New England
Carolinas Food Industry Council
College Stores Association of New York State
Colorado Retail Council
Colorado Veterinary Medical Association
Connecticut Retail Merchants Association
Delaware Veterinary Medical Association
Economic Alliance of Snohomish County, WA
Florida Association of College Stores
Florida Retail Federation
Georgia Association of College Stores
Georgia Retail Association
Georgia Veterinary Medical Association
Idaho Retailers Association
Idaho Veterinary Medical Association
Illinois Association of College Stores
Illinois Retail Merchants Association
Illinois State Veterinary Medical Association
Indiana Association of College Stores
Indiana Retail Council
Indiana Veterinary Medical Association
Iowa Retail Federation
Iowa Veterinary Medical Association
Kentucky Retail Federation
Kentucky Veterinary Medical Association
Local First Arizona
Los Angeles Area Chamber of Commerce
Louisiana Retailers Association
Louisiana Veterinary Medical Association
Maine Merchants Association
Maine Veterinary Medical Association
Maryland Retailers Association
Massachusetts Veterinary Medical Association
Michigan Association of College Stores
Michigan Retailers Association
Michigan Veterinary Medical Association
Minnesota Business Partnership
Minnesota Chamber of Commerce
Minnesota Retail Association
Minnesota Veterinary Medical Association
Missouri Retailers Association
Mountains and Plains Independent Booksellers Association
Nebraska Retail Federation
Nebraska Veterinary Medical Association
Nevada Veterinary Medical Association
New Atlantic Independent Booksellers Association
New England Independent Booksellers Association
New Jersey Retail Merchants Association
New Jersey Veterinary Medical Association
New Mexico Retail Association
North Carolina Retail Merchants Association
North Carolina Veterinary Medical Association
North Dakota Retail Association
Northwest College Bookstore Association (WA, OR, AK, MT)
Ohio Association of College Stores
Ohio Council of Retail Merchants
[[Page S2100]]
Oklahoma Veterinary Medical Association
Pacific Northwest Booksellers Association
Pennsylvania Retailers' Association
Retail Association of Mississippi
Retail Association of Nevada
Retail Council of New York State
Retail Merchants of Hawaii
Retailers Association of Massachusetts
Rhode Island Retail Federation
Rocky Mountain Skyline Bookstore Association
Seattle Metropolitan Chamber of Commerce
South Carolina Association of College Stores
South Carolina Association of Veterinarians
South Carolina Retail Merchants Association
South Dakota Retailers Association
Southern Independent Booksellers Alliance
Tennessee Association of College Stores
Tennessee Retail Association
Tennessee Veterinary Medical Association
Texas Retailers Association
Tri-City Regional Chamber of Commerce
Tri-State Bookstore Association (ND, SD & MN)
Tri-State Jewelers Association
Twin Cities Metro Independent Business Alliance
Utah Food Industry Association
Utah Retail Merchants Association
Utah Veterinary Medical Association
Vermont Retail Association
Virginia Retail Merchants Association
Virginia Veterinary Medical Association
Washington Retail Association
Washington State Veterinary Medical Association
West Virginia Retailers Association
West Virginia Veterinary Medical Association
Wisconsin Association of College Stores
Wisconsin Veterinary Medical Association
Wyoming Retail Association
Wyoming Veterinary Medical Association
COMPANIES
Abbell Associates, Chicago, IL
Acadia Realty Trust, White Plains, NY
Amazon.com, Seattle, WA
AutoZone, Memphis, TN
Balliet's, LLC, Oklahoma City, OK
Barnes and Noble, New York, NY
Beall's, Inc., Bradenton, FL
Bed, Bath, & Beyond, Union, NJ
Belpre Motor Sales, Belpre, OH
Ben Bridge Jewelers, Seattle, WA
Best Buy Co., Inc., Richfield, MN
Blake Hunt Ventures, Inc., Danville, CA
BrandsMart U.S.A., Hollywood, FL
Bucksbaum Retail Properties, Inc., Danville, CA
Build-A-Bear Workshop, Saint Louis, MO
Camelot Retail Consulting Group, Wichita, KS
Cascade Designs
CBL & Associates Properties, Inc., Chattanooga, TN
Cencor Realty Services, Dallas, TX
The Hocker Group, Louisville, KY
David Hocker & Associates, Owensboro, KY
DDR Corp., Beachwood, OH
Dick's Sporting Goods, Coraopolis, PA
DLC Management Corp., Tarrytown, NY
Donahue Schriber Realty Group, Costa Mesa, CA
EDENS, Columbia, SC
Evergreen Devco, Inc., Glendale, CA
ExOfficio, Seattle, WA
Fairfield Corp., Battle Creek, MI
Federal Realty Investment Trust, Rockville, MD
FedTax, Norwalk, CT
Foot Locker, Inc., New York, NY
Forest City Enterprises, Inc., Cleveland, OH
Gap Inc., San Francisco, CA
Garrison Pacific Properties, San Rafael, CA
General Growth Properties, Chicago, IL
Ginn Solutions
Givens Books and Little Dickens, Lynchburg, VA
Glimcher Realty Trust, Columbus, OH
Hart Realty Advisers, Inc., Simsbury, CT
Hutensky Capital Partners, Hartford, CT
Hy-Vee Inc., Des Moines, IA
Inland Real Estate Corporation, Oak Brook, II
JC Penney, Plano, TX
Jo-Ann Stores, Inc., Hudson, OH
Bellevue Square Managers, Inc., Bellevue, WA
Kimco Realty Corporation, New Hyde Park, NY
L. Michael Foley and Associates, LLC, La Jolla, CA
Larson Binkley, Inc., Kansas City, MO
Lewis Electronics, Cleveland, OH
Limited Brands, Columbus, OH
Lowes Companies, Inc., Mooresville, NC
Macy's, Inc, Cincinnati, OH
Malcolm Riley and Associates, Los Angeles, CA
Marketing Developments, Inc. MI
Marshall Music Co., Lansing, MI
Meijer, Walker, MI
Michaels Electrical Supply Corp., Lynbrook, NY
Monte Cristo Bookshop, New London, CT
Pennsylvania Real Estate Investment Trust, Philadelphia, PA
Petco, Inc., San Diego, CA
Point of View Farm, Inc., Bengali, NY
Regency Centers, Jacksonville, FL
REI (Recreational Equipment, Inc.), Kent, WA
Reininga Corporation, Healdsburg, CA
RMResources, LLC, Ann Arbor, MI
Rosen's of Maine, Bucksport, ME
Sears Holdings Corporation, Hoffman Estates, IL
Simon Property Group, Indianapolis, IN
Stafford Properties, Inc., Atlanta, GA
Staples, Inc., Framingham, MA
Steiner + Associates LLC, Columbus, OH
Stirling Properties, Covington, LA
Tanger Factory Outlet Centers, Inc., Greensboro, NC
Target Corporation, Minneapolis, MN
Taubman Centers, Bloomfield Hills, MI
The Container Store, Dallas, TX
The CortiGilchrist Partnership, LLC, San Diego, CA
The Greeby Companies, Inc., Chicago, IL
The Home Depot, Atlanta, GA
The Howard Group, Albany, NY
The King's English Bookshop, Salt Lake City, UT
The Macerich Company, Santa Monica, CA
The Neiman Marcus Group, Inc., Dallas, TX
The Pratt Company, Mill Valley, CA
The Rappaport Companies, McLean, VA
The SEAYCO Group, Bentonville, AK
The Sembler Company, St. Petersburg, FL
The Weitzman Group, Dallas, TX
Tractor Supply Company, Brentwood, TN
VPI Commercial Realty, LLC, Knoxville, TN
Wal-Mart Stores, Bentonville, AR
WDP Partners, LLC, Phoenix, AZ
Weingarten Realty Investors, Houston TX
Wendy's Company, Dublin, OH
Western Development Corporation, Washington, DC
Westfield, LLC, Los Angeles, CA
Williams Ski and Patio, Highland Park, IL
Wolfe Properties, LLC, St. Louis, MO
Woolrich, Inc., Woolrich, PA
Zumiez, Inc., Lynwood, WA.
____
National Retail
Federation
March 19, 2013.
To the Members of the United States Senate: On behalf of
the National Retail Federation, I respectfully urge you to
vote in favor of the Enzi amendment in support of S. 336, the
Marketplace Fairness Act, to the Concurrent Resolution on the
Budget for Fiscal Year 2014.
As the world's largest retail trade association and the
voice of retail worldwide, NRF's global membership includes
retailers of all sizes, formats and channels of distribution
as well as chain restaurants and industry partners from the
United States and more than 45 countries abroad. In the U.S.,
NRF represents an industry that includes more than 3.6
million establishments and which directly and indirectly
accounts for 42 million jobs--one in four U.S. jobs. The
total U.S. GDP impact of retail is $2.5 trillion annually,
and retail is a daily barometer of the health of the nation's
economy.
As the retail industry evolves and digital commerce becomes
a more prominent portion of total retail sales, it is
critical that the tax laws not discriminate between similar
businesses based on how their products are distributed. This
collection disparity has tilted the competitive landscape
against local stores creating a crisis for brick-and-mortar
retailers around the country and in your state. The
Marketplace Fairness Act addresses the crisis by removing the
constitutional limitation on states' authority to collect
sales and use taxes from remote sellers. This legislation
will level the playing field, while protecting small
businesses from complicated laws in other states with a
healthy small business exemption.
The Marketplace Fairness Act is a commonsense piece of
legislation necessary to modernize our federal and state
understanding of sales tax laws so that they can keep current
with real world change in the marketplace. Leveling the
playing field for large and small retailers alike will create
a business climate where retailers have a better opportunity
to grow and create jobs in a truly competitive marketplace.
Please support the local retailers in your state by voting
for the Enzi amendment in support of S. 336, the Marketplace
Fairness Act, to the Concurrent Resolution on the Budget for
Fiscal Year 2014.
Sincerely,
David French,
Senior Vice President, Government Relations.
____
[From, Marketplacefairnesscoalition]
Erick Erickson is Wrong, Here's Why:
This morning Erick Erickson published a very misleading
post that claims that legislation introduced by Senator Enzi
(R-WY) will raise taxes and tax online downloads.
The truth is:
The Marketplace Fairness Act will not raise anyone's taxes;
in fact it could help lower taxes by making state tax codes
more efficient and restoring state and local control.
The Marketplace Fairness Act does not tax the Internet or
Internet businesses.
The Marketplace Fairness Act has nothing to do with
iTunes--digital goods are not covered by The Marketplace
Fairness Act.
At the end of the day, the Marketplace Fairness Act gets
the federal government out of the way of state policymaking
and restores free market principles by leveling the playing
field between local, brick-and-mortar sellers and their out-
of-state competition.
By the way, it is probably a coincidence that he expresses
his sincere concern for eBay sellers. Certainly eBay couldn't
be behind Erickson's piece. The good news is that the
Marketplace Fairness Act protects small online businesses by
exempting the first $1 million in online sales--not total
retail sales
[[Page S2101]]
but specifically online sales--so the exemption actually
applies to businesses with far more than $1 million in annual
sales.
One MORE thing Erickson misses is that the tax is already
due. As an avid online shopper himself, if he isn't
calculating and remitting the use taxes he potentially owes,
he could be audited and face fines and penalties. Truth is
that every online shopper faces that threat under the current
system and that is why a significant majority of online
shoppers want the tax collected at the point of purchase.
At the end of the day we shouldn't be surprised that
Erickson is taking the side of faceless Internet sellers who
are desperately trying to protect their competitive
advantage--as much as 10% in some places.
To quote Ronald Reagan, ``facts are stubborn things.''
Erickson is entitled to his own opinion, but not his own
facts.
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. Madam President, I yield 5 minutes to the Senator from
Maryland.
The PRESIDING OFFICER. The Senator from Maryland.
Mr. CARDIN. Madam President, let me first thank Senator Enzi and
Senator Durbin for bringing forward this amendment. I agree with
Senator Alexander for his comment as it relates to this bill. Let me
talk about one of the objectives we want to see in taxes. We talk about
simplifying, we talk about fairness. We also talk about what is known
as the tax gap. That is the gap between the taxes that we have imposed
that we should collect and what we really collect. When it comes to
sales and use tax, it has been estimated that because of the place in
which an individual buys the product there is a $23 billion gap. That
is $23 billion of taxes that are owed are not collected.
This is an urgent problem. In my own State of Maryland it is $300
million a year. There are people who are paying higher taxes than they
should because Maryland has to impose higher rates to make up for that
$300 million. We all talk about a system where we can spread the base
and lower the rates. The first way you do it is by collecting the taxes
that everyone should pay.
This is a good-governance issue, this is a fairness issue, this is an
issue that is not that terribly complicated. We are not talking about
any new tax responsibilities. We are not talking about any new taxes.
We are talking about getting our local governments, as Senator
Alexander has said, the ability to collect the taxes that they impose
in a fair manner. This is a matter of fairness. This is a matter of
doing what is right.
Let me give one example that was brought to my attention by a
retailer in Maryland, a person who works in an electronics shop in our
State, where someone came into that shop recently and was shopping for
a TV monitor, a new TV set. They did all the comparative shopping,
brought the expert in from that store, answered all their questions and
decided on what television set he was going to buy. He then went on his
phone and ordered it from an Internet supplier. The price was identical
at the two locations--identical. But the person bought it on the
Internet because they did not have to pay the State sales tax. They had
to pay the State use tax, but they never paid the State use tax. That
is something we have to end. That is wrong. That is basic fairness.
The distinguished chairman of the Finance Committee points out, how
do we collect these taxes? Let me point out we already collect taxes in
our State from sales that are made outside of our State. We do it when
there is that nexus that the Supreme Court has acknowledged, and as has
been pointed out, the retailer you buy it from adds the State sales tax
by putting in their sales the ZIP Code in which we live and they
calculate the sales tax and they remit the sales tax. That is currently
being done. This is not an additional burden.
Then I heard how complex it is to figure out what taxes are owed. Let
me point out two points about that. First, the bill provides that the
States adopt the streamlined sales and use tax agreement so we have a
uniformity as far as how this is applied. But let me tell you, I do not
even know that is totally necessary because there are computer programs
today that figure this out for the retailer. The retailer knows the
products they are selling and they know how the retail sales taxes
throughout the Nation apply to the products they sell. It is a simple
program. This is not a burden to the retailer.
Senator Durbin already pointed out if you live in New Hampshire or
you live in Montana or you live in a State that may not have a sales
tax, your citizens are not going to pay a sales tax. It does not
increase anyone's sales tax. All we are saying is that when our
citizens buy products that are subject to our sales and use tax that
they cannot get a competitive advantage by going on the Internet rather
than using a retail establishment. What is wrong with that? We are not
talking about imposing any taxes on anyone.
The PRESIDING OFFICER. The Senator has used 5 minutes.
Mr. CARDIN. Let me last point out, in an effort to make sure that no
small businesses are disadvantaged, there is a small business sales
exemption of up to $1 million, so we are not talking about very small
sales. We are talking about a great deal of revenue.
I thank Senator Enzi for his leadership, and Senator Durbin. This is
long overdue. We should pass this.
The PRESIDING OFFICER. The Senator from Washington?
The Senator from New Hampshire?
MS. AYOTTE. I thought I was next. May I check that?
Mrs. MURRAY. I believe they are yielding time off the Republican
side.
MS. AYOTTE. Madam President, I rise in opposition to the amendment I
heard that is going to be filed, the so-called Marketplace Fairness
Act. I think we have need to rename this legislative proposal for what
it is, the Internet Tax Collection Act. I come from a State, New
Hampshire, that does not have a sales tax nor do we have an income
tax. One of our famous Governors said low taxes are the result of low
spending, and that is how we do it.
There has been a lot of talk on the floor today about somehow this
Marketplace Fairness Act is about States rights. This act, which really
should be named the Internet Tax Collection Act, infringes on the
rights of retailers in New Hampshire and businesses that have thrived
and grown over something great called the Internet. It forces them to
become tax collectors for the rest of the Nation. In fact, they would
be forced to become tax collectors for nearly 10,000 tax jurisdictions
across this country should this proposal go forward.
I have heard a lot of talk about leveling the so-called playing
field. There is nothing level about this playing field. These are cash-
strapped States looking for more money and asking Washington to impose
burdens on other States that have chosen to have a low tax burden, like
States such as mine which doesn't have a sales tax. In fact, this is
another attempt to turn our businesses into tax collectors. I think it
is wrong.
It is the opposite of States rights. There has been some discussion
of conservative support for this. There is absolutely nothing
conservative about this proposal because, again, what this is about is
officials in cash-strapped States across the country looking for new
ways to plug their budget holes. They are attempting to make New
Hampshire businesses, and other businesses across this country, use the
Internet to collect their taxes. This is not just about the State of
Tennessee handling its own taxes, it is making New Hampshire, which has
no sales tax, collect for the rest of the Nation, and it is wrong.
The exemption for small businesses is a red herring. This so-called
exemption doesn't even match up with what the SBA defines as a small
business retailer. We know what will happen with the small business
exemption. When the States don't get the revenue they want, they will
be right back here again looking for us to repeal the small business
exemption, saying: It is not fair that this category of businesses has
been exempt. They will be looking for more and more, and here we are in
Washington letting them trample on the States that made the decision
not to have a sales tax. This bill should not go forward.
I want to share some stories from New Hampshire. My constituents have
written to me about this. A company in Franconia, which is in the
northern part of New Hampshire, calls this a job killer. From
Pittsfield, an online coin and stamp dealer says: If policymakers
[[Page S2102]]
decide to impose new sales tax collection burdens on small businesses
and force them to collect and remit 9,600 tax jurisdictions nationwide,
the legal compliance and administrative cost alone would undoubtedly
make it harder and, in many cases, impossible to enjoy the
opportunities and benefits of the Internet marketplace.
This is from a business in Amherst:
Our company is a poster child for small family-run Internet
businesses. We have over 80,000 customers nationwide. The
burden of collecting and distributing sales tax for this
would be prohibitively expensive.
Finally, another constituent from Boscawen believes this would open
the door for States to begin taxing across their borders for many other
different taxes. Another company from Rindge says:
This bill is absolutely terrifying. I think I may not be
able to survive. I may not be significant to many in
Washington, but my little machine shop is the center of my
family's livelihood.
When I hear my colleagues come to the floor and call this a States
rights issue, what about States such as New Hampshire? Why are we going
to make this vibrant part of our marketplace, the Internet, a tax
collection haven for other States? So businesses in New Hampshire and
other States are going to collect taxes for Indiana, and this is all
because cash-strapped States are coming here and asking Congress to do
this.
By the way, for those who believe this is some kind of conservative
bill, this is not my idea of conservative. The Americans for Tax Reform
are against this, the Heritage Foundation is against this, the Campaign
for Liberty is against this, the National Taxpayer Union is against
this, Cato is against this, and the Heartland is against this.
This is not about small government. This is about forcing businesses
in States like mine, with no sales tax, to become the tax collectors
for the Nation. It is wrong.
This is not about small businesses. I urge my colleagues to vote
against the online tax collection act because that is what this really
is.
I yield the floor.
The PRESIDING OFFICER (Mr. Coons). The Senator from Washington.
Mrs. MURRAY. Mr. President, I yield 2 minutes to the Senator from
Minnesota.
Mr. FRANKEN. Mr. President, I rise today in support of the
Marketplace Fairness Act. This act will level the playing field for
small business retailers in Minnesota and across the country.
I want to thank Senator Enzi for his years of work on this. He had a
retail shoe store. I thank Senator Durbin, Senator Heitkamp, and
Senator Alexander for introducing this legislation. This legislation
will simply allow States to help their brick-and-mortar retailers,
including the mom-and-pop shops on Main Street, stay competitive in a
marketplace where online sales have become a fact of life. The
amendment we offered to the budget resolution today lays the groundwork
for passing that legislation. It is a commonsense measure which brings
our sales tax into the 21st century.
In Minnesota, the retail industry includes nearly a half million
workers, which is about one in five jobs in our State. Those retailers
need to compete on price and service every single day. The current
sales tax system makes it impossible for them to compete.
Senator Cardin spoke about something that is very common around this
country. I have heard the same exact story myself. It is where someone
walks into an electronics store and wants to buy a big flat-screen TV,
and they get the guy who knows everything to come over and point out
what is the best for their needs. The salesman is a very skilled guy.
He was hired because he knows what he is doing. He sells the TV, except
he doesn't sell it, not for his store. Instead, the customer gets on
their smart phone and buys it online. They buy the same exact model at
the same exact price, but because he or she doesn't have to pay the
sales tax--they are supposed to, by the way, but they don't--they buy
it online. They end up saving $100 and the brick-and-mortar store,
which pays for employees, sewer, schools, and everything which makes a
society work, loses the sale and cannot compete. It is just not fair.
It is just not fair.
This is a commonsense amendment. Small businesses have an exemption.
The exemption is written in the amendment. People cannot say, well,
just because they have an exemption, we are going to get rid of the
exemption in some way. It is an exemption that is a part of the
amendment we are proposing.
I am proud to be on this bill. I am proud of my colleagues on both
sides of the aisle. The Marketplace Fairness Act is common sense, it is
bipartisan, and I urge my colleagues on both sides of the aisle to
support this amendment.
I yield the floor.
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. Mr. President, I am pleased to yield 5 minutes to the
Senator from Rhode Island, who is a member of the Budget Committee and
has worked hard to get us to where we are. I appreciate his input to
get us to this point.
I yield the floor.
The PRESIDING OFFICER. The Senator from Rhode Island
Mr. WHITEHOUSE. Mr. President, I have similar stories to those that
have been described on the Senate floor today. Indeed, a former Member
of this body, who is now the Governor of our State, Governor Chafee,
wrote to me about a bookstore owner in Middletown, RI. The bookstore
owner talked about patrons who would browse for books in his store,
only to leave without actually making a purchase. He said they would
make a list of the books they wanted to buy and then went to get them
more cheaply on the Internet.
I have been approached by a Rhode Islander who works in a shoe store.
He said he has seen people come in and have his employees bring them
boxes of shoes to try on so they can find the exact size and model shoe
they want only to then walk out the door without a purchase. They have
seen it happen enough that they think what happens is the potential
customer is instead going to an Internet site so they can buy the shoe
more cheaply.
Now, there are true efficiencies and true benefits to shopping over
the Internet. It is very valuable, and it is very sensible. Those are
real factors. That is part of progress, and we have no quarrel with
that. However, we should not be using discrepancies in taxes to favor
shoe companies, one over the other, because one sells over the Internet
and the other sells out of a brick-and-mortar store where people can
actually come in and try on the shoes.
As a result of this loophole, big businesses who do business over the
Internet have $23 billion to fiddle around with that doesn't go to
support the kind of civic structure of our society--as Senator Franken
talked about.
The complexities are not that great. There is an existing Streamlined
Sales and Use Tax Agreement that simplifies this immensely. The tax
payments will very shortly be built into the basic business software.
The concern about small businesses is misplaced because we completely
exempt any business with less than $1 million in annual sales. They
have no obligation to comply with this whatsoever.
The National Governors' Association, the National Conference of State
Legislatures, the National Association of Counties, the U.S. Conference
of Mayors, the National League of Cities, the Retail Industry Leaders
Association, the National Retail Federation, the International Council
of Shopping Centers, and amazon.com, to their credit, as well as
AFSCME, support this.
I hope we can use the vote on this amendment to show that this is a
piece of legislation that we are willing to move forward on. Then, of
course, we will have to go through the legislative process of
authorization in order to actually pass it into law. The budget
amendment will not pass it into law, but I think it will send an
important signal that will bring everybody to the table and finally get
us to closure on this important piece of legislation.
I will close by thanking Senator Enzi, whom I see on the floor, for
his work and his leadership and dedication in trying to get this right
over 14 years. Before it was as easy as it is now to comply with this,
he was working on this. Every year it gets easier. Every year the
software is able to catch up more. Every year more States join the
Streamlined Sales and Use Tax Agreement. He and Senator Durbin have
[[Page S2103]]
done a service to this country with their leadership on this issue.
Mr. REED. Mr. President, the Marketplace Fairness Act is about
leveling the playing field for brick-and-mortar businesses. We have a
bipartisan and bicameral bill to do just that. So I am pleased to join
Senators Durbin, Enzi, and many of my colleagues in offering this
budget amendment today to add a deficit neutral reserve fund to ensure
marketplace fairness by allowing States to enforce their State and
local sales tax laws.
This is a big issue in Rhode Island, where businesses have a hard
time competing against out-of-State retailers because of outdated rules
that require shops on Main Street to collect revenue, but their out-of-
State online competition does not.
When Internet commerce was still in its early stages online companies
were basically exempted from collecting State and local sales tax for
sales to States where they do not have a physical presence despite the
fact there was an obligation to collect sales tax on those purchases.
This puts Main Street businesses at a competitive disadvantage, hurts
the ability of Rhode Island to keep jobs in the State, and has strained
State budgets all across the United States.
In 2012, Rhode Island lost out on estimated $70 million in
uncollected revenue. Revenue that was owed but because of an outdated
Supreme Court decision went uncollected. It is past time that we fix
this loophole.
I have talked to a lot of local business owners about this in Rhode
Island and many of them say the same thing: Since when is requiring all
customers to pay the same sales tax rate a tax increase?
This is a bipartisan proposal. It seeks to keep jobs in our
communities, and bring much-needed revenue to strained State budgets
all across the United States.
I urge my colleagues to support this amendment and continued efforts
to close this long-outstanding loophole.
I thank them and yield the floor.
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. Mr. President, I yield 5 minutes off the resolution time
to my colleague, Senator Wyden of Oregon, who is an outstanding member
of the Budget Committee. He has been waiting to come and speak. I want
to thank him as well for his valuable input throughout the process.
The PRESIDING OFFICER. The Senator from Oregon.
Mr. WYDEN. Mr. President, I thank my friend from the Northwest. We
worked it out so I could talk a little bit about Medicare and taxes as
well.
Before Senator Enzi leaves, I just want to tell him he is someone who
gives public service a good name. We have spent a lot of time working
together on a variety of issues, such as tax reform, and particularly
this idea of transition rules. I just want to tell the Senator how much
I appreciate the way he approaches problem solving. I would say to
colleagues that what I have not been able to figure out for the 10
years this debate has gone on is how we are going to make this work for
America's innovators and small businesses. Let me give just a couple
examples and be very brief.
What concerns me most about the bill as it is written today is State
revenue collectors, under this legislation, in effect, will be
outsourcing their jobs to America's small businesses, America's
innovators. If the bill passes in its present form, those small
businesses, our innovators, are going to spend their time trying to
figure out how to collect all these taxes across the land rather than
creating jobs. I don't think that is anything any of us want to do,
Democrats or Republicans. That is point No. 1.
Second, I wish to talk about the international implications of this
bill. Senator Murray and I and others, including Senator Baucus, are
very close to the border. What concerns me, especially after the legal
analysis I received from the Congressional Research Service, is I think
the way this bill is going to work, people are going to end up calling
it the shop Canada bill or maybe the shop Mexico bill or, what is even
more ominous, the shop China bill. I wish to describe exactly why that
is the case using the legal analysis from the Congressional Research
Service.
The proposal, of course, requires American businesses to collect
sales taxes on behalf of 45 State revenue collectors, but it imposes no
such burden on foreign retailers that sell into the United States. So
an Oregon business would have to collect taxes for New York, but
Chinese firms wouldn't have to collect taxes for any State. Washington
State businesses would have to collect taxes for Idaho, but Canadian
firms are under no such obligation. I ask my colleagues: What is fair
about sacking these American small businesses, these entrepreneurs,
which are adding so much value to the new economy, to make it even more
difficult for our small businesses to compete with Canadian sellers and
European sellers and Chinese sellers? This bill as written is going to
be a huge boon, for example, for the idea of setting up online
businesses in Canada.
Small businesses all across the country, especially those that are
near the border, in my view, would have every financial incentive to
incorporate there. For the life of me, I don't see how that could be
good for the American economy or fair to American firms that, for a
variety of reasons, are not capable of moving.
Senator Alexander was spot on in terms of talking about how we should
look to States rights--I am certainly interested in that--but let's not
do it so that in a globalized economy, we make it even tougher for
American innovators to compete.
At this point, I ask unanimous consent to have printed in the Record
a legal memorandum that was prepared for me by the Congressional
Research Service that describes in great detail the unfairness the so-
called Marketplace Fairness Act would create for American firms in a
global economy.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Congressional Research Service,
July 23, 2012.
To: Senator Ron Wyden; Attention: Jayme White
From: Steven Maguire, Specialist in Public Finance, 7-7841;
Jeanne Grimmett, Legislative Attorney, 7-5046; Erika
Lunder, Legislative Attorney, 7-4538
Subject: Analysis of Possible Modifications to the
Marketplace Fairness Act, S. 1832.
This memorandum responds to your questions about the
``Marketplace Fairness Act,'' (S. 1832). The Marketplace
Fairness Act (MFA) would modify current law to allow state
tax authorities to compel out-of-state vendors to collect
sales and use taxes. Your office asked CRS to: (1) analyze
the impact of expanding the MFA to require foreign sellers to
collect and remit sales tax; (2) identify legislative
proposals to achieve this and assess if these are consistent
with international trade rules; and (3) suggest other taxes
that could be collected and remitted if MFA were to become
law.
Generally, extending state sales and use tax collection
authority beyond international borders could be complicated
both administratively and legally. Under current law, states
may only impose sales and use tax collection responsibilities
on out-of-state sellers of goods and services to in-state
persons if the seller has a ``physical presence'' in that
state. This nexus standard is required by the Commerce Clause
of the U.S. Constitution. When no physical presence exists,
then the state sales and use taxes would apply to these
transactions, though remittance of the tax would fall to the
in-state buyer to the extent prescribed by state law. So,
when the seller does not have a physical presence in the
taxing state, the buyer is typically responsible for
remitting the tax to the state.
For example, consider a consumer in Virginia who purchases
a camera over the Internet or by phone from a retailer based
in New York state. The camera retailer does not have an
outlet or a physical presence (substantial nexus) in
Virginia. The New York retailer is not required to collect
New York sales taxes because the transaction does not occur
at the retail outlet and the customer is not a resident of
New York state. And, the retailer is not required to collect
the Virginia sales tax because the retailer has no physical
presence in Virginia. The Virginia consumer, however, is
required to remit the use tax to the state.
Under its authority to regulate commerce, Congress has the
power to authorize state action that would otherwise be an
unconstitutional burden on interstate or foreign commerce, so
long as it is consistent with other provisions in the
Constitution. The Marketplace Fairness Act (MFA), if enacted,
would be an example of Congress exercising that power. Under
the MFA, Congress would authorize states to shift the burden
for sales and use tax collection from the in-state consumer
to the out-of-state seller as long as the state had either
adopted the Streamlined Sales and Use Tax Agreement (SSUTA)
or if the state implemented ``minimum simplification
requirements.'' If either criteria are met, then the state
could impose sales
[[Page S2104]]
and use tax collection liability on any remote vendor if the
sale was sourced to that state under the sourcing rules in
the SSUTA or the act. Neither set of sourcing rules are
restricted to physical presence. So, for the states meeting
either criteria, the bill would essentially change the nexus
standard under the Commerce Clause by removing the
requirement that the seller have a physical presence in the
taxing state. While the bill would expand the authority of
these states to impose sales and use tax collection
obligations on remote vendors, it does not provide the states
with additional enforcement mechanisms or authority. As
discussed below, states could have difficulty in enforcing
the law with respect to foreign vendors with little U.S.
presence. CRS was not able to find any legislative proposals
that would provide such a mechanism. Since no specific piece
of legislation has been proposed, the following discussion of
possible trade agreement implications is only a general one.
Removing the ``physical presence'' requirement does not
mean that all remote vendors would be subject to the state
collection responsibilities. First and foremost, nexus is
also required by the due process guarantees of the Fourteenth
Amendment. Unlike the Commerce Clause's nexus requirement,
Congress may not change the standard required by the
Fourteenth Amendment. Thus, even if MFA were enacted into
law, states could still not impose sales and use tax
collection responsibilities on entities that did not have
sufficient contact with the state required for due process.
Furthermore, it is possible that other domestic laws could
also limit the ability of states to impose the collection
obligations. For example, state law might contain exceptions
or other provisions that limit or remove the liability in
some cases.
With respect to international law, in general, the United
States, or a subdivision thereof, could tax a sale by a non-
U.S. merchant to a person in the United States without
running afoul of what has been considered to be a consensus
view of international law regarding a nation's jurisdiction
to prescribe tax laws. As set out in the Restatement (Third)
of Foreign Relations Law:
A State may exercise jurisdiction to tax a transaction that
occurs, originates or terminates in its territory or that has
a substantial relation to the state, without regard to the
nationality, domicile, residence, or presence of the parties
to such a transaction.
The Restatement further explains that taxes on transactions
that occur, originate or terminate in a state ``include
sales, value-added, excise and severance taxes, as well as
export taxes and customs duties.'' It further notes that
``states impose sales and excise taxes or customs duties on
transactions in or touching the state, regardless of the
relationship between the participants and the state,'' but
that ``[a]n excise or tariff . . . may be imposed on a person
participating in a transaction by reason of that person's
relationship to the taxing site even though the transaction
occurs outside the state's territory.'' This latter principle
would appear to have relevance for Internet or mail order
transactions involving non-U.S. vendors, where the sales
transaction itself may legally be sited outside the United
States but the purchaser is located within this country.
Further, under international law, if a state has jurisdiction
for prescribing a rule of law, it also has jurisdiction to
enforce that rule, be it through judicial or nonjudicial
means.
At the same time, regardless of its status under
international law, a requirement that places the burden of
collecting the tax on a non-U.S. vendor with no ties to the
United States or a particular U.S. state other than the sales
themselves would seemingly pose practical problems with
regard to its implementation. It appears difficult to
envision a workable mechanism by which the United States
could compel such a vendor in a foreign country to collect a
U.S. tax. In this regard, punitive trade measures, such as
prohibiting the importation of products from foreign
companies that fail to collect the tax, would appear to raise
issues under the General Agreement on Tariffs and Trade 1994
(GATT 1994). For example, GATT Article XI:1 generally
prohibits the imposition of quantitative restrictions on
imports from other WTO Member countries and a U.S. measure
violating this provision would need to be justified under one
of the general exceptions set out at GATT Article XX. It may
be that, for practical purposes, implementation of a tax
collection requirement imposed on non-U.S. vendors that in
fact have no nexus to the U.S. state imposing the tax may
call for some sort of reciprocal agreement between the United
States and countries in which such vendors are legally
constituted. Whether such an agreement is feasible,
however, is far from clear and beyond the scope of this
memo.
Finally, some have noted that U.S. based retailers may
respond to the expanded state tax collection authority by
shifting operations outside the U.S. to avoid the collection
burden. The costs of moving operations and increased shipping
costs, however, would seem greater than any benefit conferred
by avoiding the collection burden.
With regards to your second question, national measures
involving the imposition and collection of taxes on Internet
and catalog sales of products would implicate international
trade obligations involving trade in goods and possibly trade
in services. Regarding a tax itself, Article III:2 of the
General Agreement on Tariffs and Trade 1994 (GATT 1994)
prohibits a WTO Member from imposing a sales, excise, or
other tax on an imported product in excess of the tax imposed
on the like domestic product. In addition, tariffs on
products imported into the United States from non-U.S.
vendors would be subject to GATT Article II, which prohibits
the United States from exceeding the negotiated or ``bound''
rates for particular products contained in the tariff
schedule that the United States has submitted to the World
Trade Organization (WTO) under Article II. Also, as noted
above, quantitative restrictions on the importation of
products from WTO Member countries are generally prohibited
under GATT Article XI: 1. GATT Articles III and XI are
generally incorporated into U.S. free trade agreements (FTAs)
such as the NAFTA. In addition, FTA parties are subject to
the tariff rate and tariff reduction commitments made in the
FTA regarding goods originating in the territories of the
parties.
WTO obligations in the General Agreement on Trade in
Services (GATS) apply to ``measures by Members affecting
trade in services'' and thus, were a U.S. tax collection
requirement placed on non-U.S. vendors to qualify as such,
the GATS would come into play. For GATS purposes, the measure
may be at the federal, state, or local level. According to
the WTO Appellate Body, the phrase ``affecting trade in
services'' is intended to give the GATS ``a broad reach'' and
``the term `affecting' . . . indicates a broad scope of
application.'' Here, the Appellate Body upheld a WTO panel
interpretation of the phrase ``measures by Members affecting
trade in services'' finding that ``no measures are excluded a
priori from the scope of the GATS as defined by its
provisions.''
``Trade in services'' would be involved if foreign vendor
were considered to be a service provider--likely a provider
of retail services--and the Internet or catalog sale fell
within one of the modes of providing a service covered by the
GATS. Internet or catalog sales may constitute either cross-
border provision of a service or the consumption of a service
abroad, i.e., the provision of a retailing service from the
territory of the vendor into the territory of the U.S.
consumer, or the consumption of a retailing service in the
territory of the vendor by a U.S. consumer. If the measure
were in fact covered by the GATS, the United States would be
subject, inter alia, to the GATS most-favored-nation (MFN)
obligation, meaning that it would need to accord to the
services and service suppliers of any other WTO Member
treatment no less favorable than it accords to the like
services and service suppliers of any other country.
In addition, the United States has made a sectoral
commitment under the GATS with respect to retailing services
where these two modes of service supply are concerned, thus
implicating additional GATS obligations. Thus, to the extent
that catalog or Internet sales constitute a retailing
service, and the service is provided cross-border or consumed
abroad, the United States would be subject to GATS
obligations involving market access and national treatment of
services and service providers of other WTO Members in the
retailing sector. Market access commitments generally involve
prohibitions on various types of quantitative restrictions,
such as limitations on the total value of service
transactions in the sector in the form of a numerical quota.
The GATS national treatment obligation requires that,
regarding all U.S. measures affecting the supply of services,
the United States must accord to services and service
suppliers of any other WTO Member treatment no less favorable
than that it accords to its own like services and service
suppliers. U.S. free trade agreements also contain
obligations involving trade in services, including MFN
obligations and national treatment obligations that are not
premised on specific sectoral commitments.
While U.S. trade agreements do not appear to expressly
address a situation where a foreign service provider of one
agreement party is required by another agreement party to
collect sales, excise or similar taxes on sales made by the
former in the territory of the latter, the obligations
described above would be relevant if a case can be made that
the requirement is covered by the GATS or the services
chapter of an FTA. Further, were a quantitative restriction
placed on retail sales services by a foreign service provider
to U.S. consumers as a punitive measure for non-collection of
sales taxes, GATS market access commitments may well be
implicated. As is the case with the GATT, a measure that
violates a GATS obligation may be justified under a GATS
general exception if all the requirements of the exception
are met.
Regarding your third question, the proposed MFA is narrowly
focused on sales and use taxes and would not allow for states
to use this new authority for the collection of any other
taxes:
No obligation imposed by virtue of the authority granted by
this Act shall be considered in determining whether a seller
or any other person has a nexus with any State for any tax
purpose other than sales and use taxes.
The MFA also expressly provides that:
Nothing in this Act shall be construed as--
(1) subjecting a seller or any other person to franchise,
income, occupation, or any other type of taxes, other than
sales and use taxes,
(2) affecting the application of such taxes, or
(3) enlarging or reducing State authority to impose such
taxes.
If you have any questions, please call Steven Maguire on 7-
7841, Jeanne Grimmett on 7-5046, or Erika Lunder on 7-4538.
[[Page S2105]]
Mr. WYDEN. Mr. President, I will just wrap up with this. As
colleagues look at this--and we are going to have plenty of debate--
let's think through the implications of what the administrative water
torture is going to be all about for small businesses and why it
doesn't make more sense for State tax collectors to do their job, No.
1; and No. 2, let us not make it harder for American small business to
compete in tough global markets. It is plenty tough as it is.
I yield the floor.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SESSIONS. Mr. President, I yield 5 minutes to Senator Cochran.
The PRESIDING OFFICER. The Senator from Mississippi.
Mr. COCHRAN. Mr. President, it is encouraging that for the first time
in 4 years the Senate is considering a budget resolution. The absence
of a resolution during this time has contributed to a breakdown in the
legislative process. As a result, we have operated the Federal
Government without a blueprint for revenues or spending.
Unfortunately, the budget resolution being considered by the Senate
does not reflect a workable effort to get our country back on a
sustainable path.
But rather than setting us on a new path toward a more affordable,
efficient, and effective Federal Government, the Budget Committee has
laid out a plan for higher taxes and more spending. It does not even
pretend to balance the budget. Support of this budget would represent
support for a bigger Federal Government and a weaker economy.
I have heard from many of the hard-working citizens in my State who
are ready for better economic times and more opportunities to improve
their lives. Our priority should be to help strengthen the economy and
get government spending under control. The Obama administration has
embraced a course which locks us into higher and higher deficits for
the foreseeable future.
I am hopeful we can amend this resolution to produce a serious
proposal that will lead to a more efficient, more effective Federal
Government that better serves hard-working Americans rather than
increasing the government's burden upon them.
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. I yield 3 minutes off the resolution to the Senator from
Minnesota, and then she will take her 30 minutes as the chairman of the
Joint Economic Committee following that.
The PRESIDING OFFICER. The Senator from Minnesota.
Ms. KLOBUCHAR. Mr. President, I thank Senator Murray for her great
leadership. I also wish to thank Senator Enzi and Senator Durbin on the
Marketplace Fairness Act. This is a bill and an amendment that needs to
pass. It is incredibly important to small businesses, big businesses,
and to people across this country who work for retailers.
When I travel around my State, I hear from small, locally owned
retailers about the competitive disadvantage they face against online
retailers, small businesses such as Creative Kidstuff that sells
educational and developmental books for kids and Thrifty White
Pharmacy, a full-service, employee-owned drugstore.
Right now, States are currently unable to require out-of-State or
online-only retailers to collect sales tax and it puts local mom-and-
pop stores at a disadvantage. Not only that, but this tax loophole is
draining billions of dollars in lost revenues from State and local
governments--$23 billion last year alone across the country.
In effect, this tax loophole subsidizes some taxpayers at the expense
of others and some businesses over others. That is why we call this the
Marketplace Fairness Act.
I have been committed to a competitive agenda for this country since
I got to the Senate, and part of that agenda includes not only
encouraging competition and innovation, but it is also about having an
even playing field for our businesses. Minnesota alone lost about $394
million in 2011 from out-of-State sales that are legally due but not
collected. This lost revenue translates into over 7 percent of
Minnesota's general sales tax liability in 2011. That is what we are
talking about. This is real money.
One of the longstanding principles of tax fairness is that similarly
situated taxpayers should be taxed similarly. A bookstore on Grand
Avenue in St. Paul has to charge a sales tax, while an online retailer
selling that same book hundreds of miles away does not. A consumer
buying a T-shirt in downtown Duluth is taxed differently than his
friend who is buying that same T-shirt on the Internet. Someone buying
a TV at Best Buy--hometown company--in Richfield, MN, is taxed
differently than if he buys the same TV online.
Our current situation encourages tax avoidance, undermines our tax
system, and ultimately creates a competitive disadvantage for brick-
and-mortar retailers at a time when we want them to succeed.
I am so excited that there is a bipartisan group of Senators
supporting this bill. Our momentum is growing. We can see it today on
the floor.
I ask unanimous consent to have printed in the Record a list of some
of the supporters from my State that includes major stores such as
Target and Best Buy to the Uffda Shop in Red Wing, MN. I have shopped
there and I suggest my colleagues do the same. It also includes Mary's
Morsels & Catering and Sleepy Eye Floral & Design, to give my
colleagues just a sense of the hundreds of companies that support this
in Minnesota.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Stand With MainStreet.com.]
Minnesota imposes a sales tax that brick-and-mortar
retailers (and their websites) collect at the time of
purchase and remit to the state. Today some online-only
retailers (including Amazon.com) are exploiting a loophole
that allows them to not collect Minnesota sales tax on these
same purchases, placing the burden on consumers to self-
report and pay that tax directly. However, few do. This gives
online sellers a competitive advantage by not collecting the
tax and creating the perception that online-only purchases
are ``tax free.'' The Minnesota Legislature is considering a
proposal to require large online-only retailers to collect
sales tax at the time of purchase like brick-and-mortar
retailers are already required to do and to bring fairness to
the marketplace. Competition among businesses, whether they
operate on the Internet or in Minnesota communities, is
important. The proposal being considered by the Legislature
establishes fairness for a 21st century marketplace and makes
sure that all sellers have the same tax collection
obligations.
E-Fairness Supporters
Statewide businesses;
Target; Walmart Home Depot; JCPenny; Best Buy; Creative
Kidstuff; Barnes & Noble; Sears; Thrifty White Pharmacy;
Walgreens.
Small businesses
Hennen's Furniture; Happy Sleeper Furniture; Quality
Appliance & TV Center; Roberts Fine Jewelry; Eichorn's
Furniture; Brownie Furniture; Jenia's Appliance & TV;
Woodwards Books; Puffes Fine Jewelry; Ferrin's Furniture; Red
Wing Appliance; Wanshura Jewelers; Johnson-Mertz Appliance;
Garon Bros Jewelers; Security Jewelers; First Photo;
Bookstore at Fitgers; Ski Hut; Explorations; J Skylark Co.
Toys for Keeps; Logan's Furniture; Appliance Village Co.
Master Jeweler; Waconia Farm Supply; Factory Direct
Furniture; Linsk Flowers; Drury's Furniture; Grand Jete;
Schroeder's Appliance Center Kern's Appliances; Bethany Book
& Gift; Cycle City; Bob & Frans Factory Direct; Cattale's
Books & Gifts; Uff da Shop; Rick's Home Furnishings; Yetzer's
Home Furnishing; Vacuum Cleaner Outlet & Services; Valley
Bookseller; Bakkum Enterprises, LLC; Mary's Morsels &
Catering LLC.
Spicer Bike & Sports; Uncle Hugo's Science Fiction;
Bookstore/Uncle Edgar's Mystery Bookstore; T & M Athletics;
Artistic Floral; Dieknnan's Jewelry; Rhoda's Closet Inc.
Hillary's; Pete's Surplus; Christian Book Store; Glenwood
Floral & Greenhouses; Kraning Jewelry Inc.; Jenny & Co; The
Framing Place and Gallery; Yarn Harbor; Gem Classics Inc.;
Teske's Jewerly Inc.; Adventure Cycle and Ski; Bissen's
Tavern; J B Off Sale Liquor.
Casey's Bar Inc.; Country Rose Floral; Collins Feed & Seed
Center; Liquor Mart; A Johnson and Sons Florist; Kalli's
Place; That Special Touch Flower Shop; Strom Clothing Co.;
Thomas Liquors; Dar's Pub Inc.; Judy's House of Gifts;
Suzanne's Jewelry; Big Guys Bar; Beltone Hearing Care Center;
Woodwards Books, Yarns, Fabrics; Anderson Memorials Inc.;
Eastside Express; Northwedge Greenhouse; Tradewind Products
Art II (Framing & Art Supplies).
Fleur de lis; Replay MMG; Sleepy Eye Floral and Design;
Chapel of Love; Grand Performance; Uncle Louie's Cafe; OFF
Sale Liquor; Artistic Treasures; Phillson Award Etc. LLC;
Double J Cafe; Antle's Long Guns & Accessories; Village
Liquor; Dan's Dugout; Bremer's Bar Inc.; Shooters Pub LLC;
Bill's
[[Page S2106]]
Repair; Town and Country Cafe; Stavrakis Jewelers; Wothe
Bait; Life in Lavender.
Lake City Radio Shack; A&W Consulting; Bloomington Jewelry
& Trophy Co.; Brinky's Liquor; C&J Store; Country Floral;
Crosstown Market; Deb's Snow Sled Inn; Hwy. 25 Liquor; La La
Homemade Ice Cream; Mike's Drive-In Liquor, Inc.; Moments On
Main; On Sale Liquor; Oriental Orchid; Preston Liquor Store
LLC; RMR Inc, Roger's Grove City Liquor; Slim's Wood Shop;
Stogies Discount Tobacco; Trailhead Cycling & Fitness.
Nelson OFF Sale Card Shop; Colonial Laundry, Tara's Sewing
Shop; Witoka Tavern; Doug's Bar; Bud Rose Flowers; The Attic
Gallery; Cattales Books & Gifts (new & used book store); The
Gumdrop Tree; Pioneer Cycle; Buskala's Jewelry; Straight
River Sports & Fitness; Van Guilders; Bayside Floral;
Waldeland Jewelry & Gift; Soderbergs Floral and Gift.
Business organizations
Midwest Bookseller Association; Midwest Hardware
Association; Minnesota Retailers Association; Minnesota
Chamber of Commerce; Hibbing Area Chamber of Commerce; Saint
Paul Area Chamber of Commerce. Dakota County Regional Chamber
of Commerce; Richfield Chamber of Commerce; Minnesota
Business Partnership; American Booksellers Association;
Alexandria Lakes Area Chamber; Litchfield Chamber of
Commerce; Woodbury Chamber of Commerce; Chisholm Area Chamber
of Commerce; TwinWest Chamber of Commerce.
Other
Dakota County Board of Commissioners; Sleepy Eye Herald
Dispatch.
Ms. KLOBUCHAR. Mr. President, I will conclude my remarks by saying
this is an opportunity to help our State and local governments, but it
is a big opportunity to help the employees and workers of this country
who work every day, showing those TVs, making sense of things,
explaining how things work, going to work every day, putting those
flowers in the vases. They deserve an equal playing field. This
amendment does it.
I am now going to begin my 30 minutes of Joint Economic Committee
time. I am the vice chair of the Joint Economic Committee, which is a
joint committee with the House and I am the Senate chair.
I ask unanimous consent to speak for up to 10 minutes, that Senator
Tester be permitted to speak for up to 8 minutes, that Senator Sanders
be permitted to speak for up to 5 minutes, that I then again be
permitted to speak for up to 5 minutes, and that Senator Franken be
permitted to speak for up to 2 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Ms. KLOBUCHAR. Mr. President, I wish to first thank Senator Murray
again for her leadership on the Budget Committee. Day in and day out,
month in and month out, she has been working on this budget and she has
achieved, along with the committee, a smart, balanced proposal for
meeting our country's fiscal challenges.
This is not the first time I have come to the Senate floor to talk
about the critical need for a balanced approach and to bring down our
debt in a balanced way, but this is the first time in a long time I
have actually felt optimistic that we are going to get a budget through
the Senate and optimistic that there are a lot of stirrings of
bipartisanship and compromise. While our budget, as has been pointed
out and I will point out, is very different than the House budget, I
think there are still grains of compromise there. We have seen this
willingness in the Senate, with our Republican colleagues, to talk
about bringing the debt down, whether it is the Gang of 6 or the Gang
of 8 or whether it is the work of Simpson-Bowles or the work done with
the Rivlin-Domenici group. These are all reasonable proposals. We don't
agree with everything in them, but they are all reasonable proposals
and they contain some balance.
The other reason I am optimistic is that we have a great opportunity
here. I was reminded of this last week when former Republican Senator
Judd Gregg testified before our Joint Economic Committee. He actually
paraphrased the Foreign Minister of Australia saying, ``The United
States is one debt deal away from leading the entire world out of
economic doldrums.''
I couldn't agree more. Look at the economic news we have had in just
the last month. We know there is so much work to do, that there are too
many people unemployed, and there is too much investment that is not
being made. But we also know that we saw the best month for
unemployment numbers than we have seen in 4 years. We are seeing a
turnaround in the construction market. We are seeing a turnaround in
the housing market. I can tell my colleagues that in my State, we have
unemployment that is at about 5.6 percent. So we are seeing progress,
but we have more to do. The last thing we need to do now is to go
backward. We need to go forward, and that is what Senator Murray's
budget does in a very balanced way.
As I have said many times before, we are talking about balance. I
believe the Senate budget achieves the right equilibrium. It includes
an equal mix of responsible spending cuts and new revenue from closing
loopholes and ending wasteful spending in the Tax Code. Our proposal
builds on the $2.4 trillion in deficit reduction we have already
received--I don't think every citizen knows that--$2.4 trillion. Let's
remember 70 percent of that was spending cuts and the other 30 percent
was revenue. That is a balance. It is not exactly the balance we wanted
on our side of the aisle, but if we were to adopt the House budget
right now, we would be at, if we include the past revenues, 10-to-1
spending cuts to revenue. That is not the balance we are seeing in the
other proposals that have been made by these bipartisan groups.
How does our budget do this? The additional debt reduction to the
$2.4 trillion we have done to get to over $4 trillion in debt
reduction--first of all, $975 billion in targeted cuts and $975 billion
in revenue. Again, this will help us to surpass the bipartisan goal of
$4 trillion and put our debt-to-GDP ratio at about 70 percent.
Some of the most important points in the Senate budget include the
fact that it replaces sequestration--which is just a hammer--with
smart, targeted cuts while also making critical investments in areas
such as education, workforce training, and infrastructure.
When I get out in our State with our unemployment rate at 5.6
percent, I hear time and time again that there are jobs unfilled, that
we need to train workers, that we need our high school kids to be going
into trades again, to be going into technology, math, and science. This
budget accounts for that. It produces savings in Medicare and Medicaid
by eliminating waste and fraud, promoting efficiency, and emphasizing
cost alignment. We know a little bit about this in Minnesota, with the
Mayo Clinic and the way we deliver health care in a high-quality, low-
cost way.
One study out of Dartmouth showed that if they simply used in the
rest of the hospitals across the country the cost-effective ways of the
Mayo Clinic, we could save $50 billion--$50 billion in 5 years with
chronically ill patients. That gives a sense of what we are talking
about when we talk about high-quality, low-cost care.
Our budget also recognizes there is a massive amount of spending that
takes place through the Tax Code to the tune of over $1 trillion per
year in tax expenditures.
I come from a State with a thriving renewable energy sector, and 2
years ago we agreed to let the ethanol tax credit expire at the end of
2011, which saved billions of dollars. In fact, that was $60 billion in
10 years--$60 billion. I do not understand why the oil industry cannot
follow ethanol's lead. I am proud of the work they are doing. I have
been out to Lewiston. I have seen the drilling in North Dakota. It has
helped to increase our own domestic oil production and decrease our
dependency on foreign oil. But I do not believe the oil companies still
need $40 billion in 10 years. That is a lot of money we could bring in
to reduce the debt.
We can make other commonsense changes. One I would propose is with
the home mortgage deduction, very near and dear to everyone's heart.
Cap it at $500,000 in value of a home. If you buy a million-dollar
home, great. Then you get it for up to $500,000 in value of the home.
That brings in tens of billions of dollars in debt reduction.
All told, the proposal that is coming out of Senator Murray's budget
reduces the deficit by approximately $2 trillion. If enacted, our debt
will continue on a downward path, where our debt-to-GDP ratio will be,
as I mentioned, about 70 percent. The Congressional Budget Office has
stated that a debt-to-GDP ratio in that range would also result in a 1-
percent increase in the size of the economy in that year.
We cannot discount the impact that a growing economy can have on
deficit
[[Page S2107]]
reduction. CBO expects GDP growth to be above 3 percent in 3 of the
next 4 years. As the economy grows, we will see more revenue, and we
will see lower deficits.
Former CBO Director Alice Rivlin, who just testified last week at a
Joint Economic Committee hearing on the very topic of debts and
deficits, said this:
The really important thing is to keep the debt from growing
faster than the economy.
I could not agree more. Deficit reduction must be paired with
economic growth. This is where we need to be, and I am optimistic that
ultimately--while we have many differences that we are going to hear a
lot about today--ultimately, we are going to come together on something
that works for America.
Unlike the proposal in the House, I will tell you the Senate budget
preserves and protects Medicare, ensuring that it is there for our
seniors today and strong for our children and grandchildren tomorrow.
I firmly believe we can make some reforms to our Social Security
safety net, and that those reforms--that money--can go right back into
Social Security to keep it solvent. On the Medicare front, there are
many things we can do without reducing the benefits for our current
seniors, for the people who deserve that help.
Look at what we could do. The VA negotiates prescription drug prices
and gets much less expensive drug prices for high-quality drugs. Right
now, we do not do that with Medicare. By negotiating prescription drug
prices under Medicare Part D, you could produce $240 billion in savings
over 10 years right there. Why not leverage the power of America's
seniors? They have a lot of power.
We all agree we need to reduce our debt. But our ultimate goal is not
simply a balanced budget; it is a budget that is balanced.
Let's look at what goes on with the Ryan budget. Well, the Ryan
budget gives millionaires a huge tax cut, drastically lowering their
income tax rate from 39.6 percent to 25 percent.
Last year, the Joint Economic Committee, on which I serve, estimated
that a similar plan introduced would have given millionaires an
additional $285,000 in tax breaks, while hitting the average middle-
class family with a $1,300 tax hike.
He also claims his tax cuts for the wealthy, which would cost about
$4.5 trillion--and I say that because I believe they would be paid for
by the middle class--will not add to the deficit. But Ryan refuses to
name one specific loophole or expenditure that his budget would
eliminate to pay for the tax cuts.
Some experts project that such extreme cuts, as we would see in his
budget, would cost jobs. I believe that is true. That is why, as we are
seeing this improvement in stabilization of our economy, we need to do
things in a balanced way over the long term. We need to send the clear
message that we are reducing this debt and get to our goal of $4
trillion in debt reduction in 10 years. But we simply cannot do it by
doing it on the backs of the middle class who are still struggling in
this country.
I urge my colleagues to support this budget proposal. It is time to
get it done. I truly see this as a time of opportunities not only in
the next 2 days to get the budget done, but also in the next few months
as we negotiate with our colleagues across the aisle to get a budget
for America.
Thank you very much, Mr. President.
I now yield 8 minutes to Senator Tester of Montana.
The PRESIDING OFFICER. The Senator from Montana.
Mr. TESTER. Mr. President, I thank the senior Senator from Minnesota.
I thank her very much for her comments.
I rise to join my colleagues who understand the need to strengthen
our economy while taking responsible steps to reduce our deficit.
Four short years ago we were coming out of the worst economic
recession, depression, since the dirty thirties. Today, this country
needs a budget that tells Americans we are serious about growing our
economy and creating jobs. Strengthening our economy will increase
economic opportunities for all Americans and allow small businesses to
expand and hire more workers. But a stronger economy will also help us
reduce our deficit without cutting the investments that lay the
groundwork for a better future for our kids and grandkids: investments
in education, in infrastructure, in our health, investments in our
veterans.
That is why the budget we are debating today is the responsible path
forward for this Nation. It sets forth our priorities. It reduces our
deficit without cutting the legs out from underneath our economy. It
also tells Americans that we are not going to sacrifice those critical
investments to strengthen our economy and enable our economy to grow.
Montanans know what it is like to live within their means. We do not
spend what we do not have. And our State government is required to have
a balanced budget. That is why Montana is one of the few States that
survived the recession without dropping into the red. I am going to get
into that in another area shortly.
We cannot tear the Federal Government apart to make up for the
decisions that put us here in the first place. Ten years ago, we put
two wars on the credit card at the same time we drastically cut taxes.
Those choices quickly squandered the budget surplus we had in the
1990s.
Today the Republican plan approved by the House, known as the Ryan
budget, uses tricks and gimmicks and smoke and mirrors to balance the
budget. It sacrifices the welfare of our seniors, our students, and our
veterans to get us back to the good old days.
It ends Medicare as we know it. It hands seniors a voucher that down
the road will grow at half the rate of anticipated medical costs. Under
their plan, for a procedure that a senior can afford today, tomorrow
they will get a voucher for a part of what that procedure will cost,
and they will be told: You make up the rest. And if you don't, too bad.
The Ryan plan also freezes Pell grants for students at a time when
education costs continue to grow too fast for middle-class families to
afford. Pell grants, education--a major driver in our economy.
It also makes it harder for low-income and unemployed veterans to get
the health care they need. The Ryan plan is what I speak of. It cuts
funding for women's health care and reduces coverage for preventative
health services, such as cancer screenings--affecting 47 million women
across this country. It does this while protecting tax loopholes for
large corporations and failing to invest in roads and bridges. And the
senior Senator from Minnesota knows all about bridges that collapse.
She had one collapse in Minnesota. Those investments are necessary.
If you balance the budget by taking the country apart, what is the
point of balancing the budget?
Now, there is no doubt we must reduce the deficit, and the Democratic
plan responsibly cuts our deficit by putting us on a responsible long-
term path that gets our fiscal house in order while investing in
initiatives that grow our economy. It reduces the deficit by nearly $2
trillion over the next 10 years. Now, that is not chump change, and
that is on top of the work we have already done over the last few years
to reduce the deficit by $1.6 trillion. It does this while protecting
seniors, women's health, middle-class families, and students.
Here is the kicker: Only the Democratic plan reforms the Tax Code and
puts those savings toward deficit reduction. The Republican plan
specifically forbids new revenue from tax reform to go to lower the
deficit. For a party that claims balancing the budget is its holy
grail, it is puzzling that Republicans want to use tax revenue to pay
for more tax cuts. This is just one of many radical proposals and
budget gimmicks they are proposing.
If you are for a balanced budget, then you must be for balanced
deficit reduction. Every bipartisan commission that has looked at the
problem agrees: to responsibly balance the books, you need to save
money through a comprehensive plan that cuts spending, reforms
entitlements, and fixes our Tax Code--and uses that savings to pay down
the debt.
The time for commissions and working groups is past. We should have
learned those lessons. We are here now to do the work to get our long-
term deal to fix the budget. We will have to
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compromise, and that is the way it should be, because working together
is what built this country. But only one plan is closer to where we
need to be at the end of this debate. The Democratic plan cuts
spending, keeps in place reforms to our health care system, and
mandates the tax reform we need.
Tax reform will not be easy, but there are a few things that should
not be hard to agree on either. I think tax loopholes for big oil and
gas companies and corporations that ship jobs overseas should be wiped
off the books.
We have two paths we can follow. One path drags this economy into a
ditch by dismantling Medicare and cutting investments in infrastructure
and our future. The other path takes a balanced approach to put this
country on the road to long lasting economic growth and stability.
We have been lurching from one crisis to another for far too long. It
has hurt job growth because businesses are holding back. They do not
know where the debate in Washington is headed.
Offering them more certainty and strengthening this economy is
something we need to do. We need to do it in a responsible way. We need
to come together around a plan that strengthens our economy in the
short term while taking real steps to reduce our deficit in the long
term.
Senator Murray's plan is a better choice. It meets the needs of the
American people. It shows them we are willing to lead. That is what we
were sent here to do.
Mr. President, may I ask how much time I have?
The PRESIDING OFFICER. The Senator has 2 minutes remaining.
Mr. TESTER. Perfect. Let me also take 2 minutes to comment on an
amendment that some of my colleagues spoke of that will be filed to
this resolution.
It is an amendment that would not only impose new burdens on small
businesses but would also fundamentally alter the rights of States by
allowing them to tax entities located outside their borders.
Now, I heard a few Senators earlier today advocating for the
elimination of the current standard that only allows States to tax
entities with a physical presence in that State.
Montana is one of those States that does not pay a sales tax. We do
not want a sales tax. It has been on the ballot a number of times. It
has been voted down by the people every time. But under the provisions
that some in this Chamber are pushing, small businesses in Montana
would be forced to do the bidding of the departments of revenue in
other States by collecting and remitting their sales taxes.
Montana's budget is currently operating at a surplus--without a sales
tax. The idea that other States would balance their budgets on the
backs of Montana's hard-working businesses is not only wrong, it is
flat insulting.
This is an unfunded mandate on Montana's small businesses, and it is
a slippery slope of what businesses will do to take their collections
out of State.
Where is it going to go from here? Agricultural products grown and
raised in Montana and marketed in other States? This is an aberration
of States rights--rights which so many in this Chamber say they
support. I would urge my colleagues to vote against any measures that
would gut these States rights.
With that, I thank the Senator from Minnesota and yield the floor.
Mr. SESSIONS. Mr. President, what is our agreement at this point?
Ms. KLOBUCHAR. Mr. President, the Joint Economic Committee has 30
minutes on our side, and I do not know on the Republican side. I think
we are about halfway or more into it.
Mr. SESSIONS. You are into it?
Ms. KLOBUCHAR. Yes.
Mr. SESSIONS. OK.
The PRESIDING OFFICER. There is 12 minutes remaining in the period of
time allotted for Joint Economic Committee remarks.
Mr. SESSIONS. I thank the Chair.
Ms. KLOBUCHAR. If the Senator would like to speak for a minute or so,
if he has something he would like to say.
Mr. SESSIONS. Mr. President, I ask unanimous consent to speak for 2
minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SESSIONS. Mr. President, I appreciated Senator Tester's remarks
and his belief that Montanans believe they should live within their
means, and he supports a plan to reduce the deficit. But I just want to
share with my colleagues that the budget that is before us today is not
balanced. It does not reduce the deficit. It taxes a lot more, but its
spending increases at the same level, and there is no net change in the
unsustainable debt course we are on.
He said it reduces the deficit by $2 trillion. I want you to know
that is what the Budget Committee claims for that budget, but it is not
accurate. It does not reduce the deficit $2 trillion. It does not. It
keeps us on the same path.
It is not a balanced deficit reduction plan, because it doesn't
reduce the deficit. It increases taxes and increases spending, if you
call that balance. It is not the right kind of plan. I wish we could
get together on fundamentals of numbers in that budget.
I yield the floor.
The PRESIDING OFFICER. The Senator from Minnesota.
Ms. KLOBUCHAR. Mr. President, I think we have made our case here with
the $975 billion in spending cuts that are contained in the budget, and
the fact that to date we have made $2.4 trillion in debt reduction, and
of that 70 percent or $1.5 trillion has been spending cuts. What we are
simply trying to do with this budget is keep this balanced approach to
not set an economy--which was literally on its heels a few years ago--
back in the same place. We want to do deficit reduction. We want to
give our businesses the kind of consistency and incentive to invest,
but not do it in a way which Chairman Bernanke has said would cause a
sharp contraction by doing too much too soon at once on the backs of
the middle class and seniors. I am very hopeful in the coming months I
will be able to find some kind of compromise and agreement with our
colleagues.
The American people are tired of the gridlock. They want to see
people are willing to work together. I truly believe courage is not
just standing alone but standing next to someone you don't always agree
with for the betterment of this country. Senator Sessions and I have
worked very well together on Judiciary matters, and I wish to continue
to do this on the budget.
Turning to another matter, I spoke about marketplace fairness, and I
support that amendment to this bill. I also want to talk about the
medical device tax repeal. As I mentioned before, one of my major
focuses in the Senate has been on an innovation agenda, the idea we
should manufacture items in this country, invent things, and export to
the world. This is how we are going to get out of the current situation
we are in. I believe we can do it.
We need to do it by promoting innovation all across this country. My
State has a long history of innovation, bringing the world everything
from the pacemaker to the Post-it note. We are home to one of the
world's leading medical device companies, Medtronic, started by Earl
Bakken in his garage. It is not just the large medical device companies
and their employees who keep this industry running, the small- and
medium-sized companies and their entrepreneurs are incredibly vital as
well.
In Minnesota we have over 400 medical device companies employing more
than 35,000 people across the State. This thriving technology, the
medical technology sector, has been one of the keys to our success and
one of the bright spots in America's economy. When you look at the
potential for exports, as you see a growing middle class in China and
in India, people are finally going to the hospital. They are beginning
to receive good health care. We have a great potential here for more
jobs in America as long as we do this correctly.
The United States is currently the largest net exporter of medical
devices in the world, yielding a trade surplus of roughly $5.4 billion
a year. Medical device companies are also responsible for creating
millions of high-paying, highly skilled American jobs, exactly the
kinds of jobs we want in this country. These are the kinds of jobs
where every parent sends their kid to high school and says, is he or
she going to learn something which will create a job? I am looking at
our pages right now, and I can tell you medical device jobs are one of
those kinds of jobs.
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In order to ensure our country remains a world leader in medical
device innovation, we need to address the 2.3-percent excise tax on
medical devices. As you know, this came out through the Affordable Care
Act. At the time I opposed that tax. We negotiated and were able to get
it halved from $40 billion to $20 billion in 10 years. It still isn't
right because it creates too much of a burden.
Medical device manufacturers are not the ones which are going to get
multiple new customers, millions of new customers out of the increase
in coverage in the health care bill. Pharmaceuticals might. They
negotiated something. Think about it. A lot of medical devices are used
by people who are older. They tend to have health care coverage with
Medicare and other things. This is the issue here is this is not at the
right rate, this is not the right tax, and it should be repealed. The
tax is a burden on medical device businesses but, most importantly, it
is a disincentive for jobs. It stifles innovation, and it makes it more
difficult for the next generation of lifesaving devices to make it to
the market. I have been fighting to reduce it, repeal it, and to delay
it since the first day it was introduced. At the end of last year, I
rallied a record number of Democratic Senators behind the effort. While
we couldn't get an agreement included in the fiscal cliff negotiations,
we had great traction. I think there were 18 or 19 Democratic Senators
in strong support.
I see Senator Coats from Indiana, as part of the strong support we
had on the Republican side for repealing this tax.
This is why Senator Hatch and I have filed an amendment to the budget
resolution to repeal this tax and help give these businesses and their
employees the certainty and stability they need to keep researching,
developing, and inventing the next medical breakthrough. Our amendment
now has the support of 28 of my colleagues from both sides of the
aisle. I am hoping we can continue to work in a bipartisan way.
I yield 2 minutes to my colleague Senator Franken of Minnesota to
speak about this important issue.
The PRESIDING OFFICER. The Senator from Minnesota.
Mr. FRANKEN. I rise today to speak about the promise of biomedical
innovation in our country, as did Senator Klobuchar. I talk a lot about
the importance of biomedical innovation because in my home State of
Minnesota there are 400 medical device companies, and there are more
than 30,000 employees who support our economy while creating high-
quality jobs. They do it while saving and improving patients' lives.
The industry is being punished for its innovation and growth. The
medical device tax is cutting into the proceeds which go toward
research and development and workforce training. By taxing companies on
the first dollar of sales, they are especially hurting the very small
companies, the startup companies, which may not be in profit yet. This
is why I am happy to join with Senator Klobuchar, with Senator Hatch,
in filing this amendment to the budget resolution to allow for the
repeal of the medical device tax. This amendment is an important first
step toward fully repealing the tax and providing much-needed relief
for our innovators and doing it in a fiscally responsible way.
Along with Senator Klobuchar, I fought this tax from the beginning.
The health care law will insure 30 million new Americans while also
improving the health care of every American citizen. While I am proud
to be a champion of that law, I believe the medical device tax is not
the way to pay for it.
On this point, I disagree with the Obama administration, as I did
from the beginning. Senator Klobuchar also disagreed from the
beginning. We fought against the tax and ultimately we were successful
in getting it cut in half from what it was when it came out of the
Finance Committee.
As a member of the HELP Committee, I will continue to improve our
regulatory process. I am very proud I had a part in helping create the
Medical Device Innovation Consortium, a private-public partnership in
this industry which is a first of its kind. Part of this, I believe, is
the full repeal of the Medical Device Act. As a first step, I ask my
colleagues join those of us who are cosponsors of this critical
amendment.
I yield the floor.
The PRESIDING OFFICER. The Senator from Minnesota.
Ms. KLOBUCHAR. I thank Senator Franken for his strong words in
support of this amendment. I thank him for being a cosponsor of this
amendment.
May I ask how much remains on the Joint Economic time?
The PRESIDING OFFICER. There is 4 minutes remaining.
Ms. KLOBUCHAR. I want to thank the Senators who joined me today as we
work to advance a smart, balanced approach for meeting our country's
fiscal challenges. The time is ripe for common ground on a budget plan
to move the economy forward. While I don't know if we will have that
bipartisan plan in the next few days, I think we will get a budget
through this Chamber which will pave the way for the kinds of
bipartisan negotiations we need to have. We need to keep this country
moving, and moving in the direction we need.
When I go out there and talk to small companies throughout my State,
they want us to get something done. They want to have consistency so we
are not playing green light, red light with the Tax Code; that they
know exactly where they stand. I think they all acknowledge everyone is
going to have to sacrifice a little here. I think they acknowledge we
are going to have to do something which makes a difference and not just
speak about it anymore. We have not only the opportunity but the
responsibility to find common ground on a deficit reduction plan which
will help build a stronger, more resilient framework for economic
renewal so families and businesses have the certainty they need.
I think we know neither party is going to get everything it wishes,
but this doesn't mean we can put our heads in the sand and pretend this
isn't happening. I truly appreciate my Republican colleagues. When we
meet behind closed doors and speak about this, they have a willingness
to compromise. I think this is what will happen in the future. However,
our job in the next 2 days is to get a fair budget through a balanced
budget.
This is what Senator Murray's budget is. I have been part of this,
and I look forward to working with her and our colleagues in the future
to show the American people we can stand tall and do what is right.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Indiana.
Mr. COATS. Mr. President, I rise today as the senior Senate
Republican of the Joint Economic Committee to discuss one of the most
fundamental issues this body confronts on a year-to-year basis, or at
least should confront on a year-to-year basis, which is passing a
budget through which we could operate the rest of the year and measure
how we spend hard-earned taxpayer dollars.
Unfortunately, we haven't had one of these budgets for 4 years. I am
pleased we finally have arrived at this particular point. I will speak
about that in more detail.
A few years back when I was serving as Ambassador to Germany, I made
calls on the various ministers. They would be equivalent to cabinet
secretaries in our country. I would always try to get a little
background information on them before I went to see if we had anything
in common, or an ice breaker to start the conversation.
I was calling on one of the ministers and noticed, reading his
background first, his birth date was the same as mine. It was a
milestone birthday. We were both born in 1943. At the time, the date of
my seeing him was just a couple of months after we both celebrated our
60th birthday.
To break the ice, I said to him: Mr. Minister, we have something in
common.
He said: What is that?
I said: We both were born on the same day. Therefore, we both reached
a very important milestone in life.
He looked at me seriously and said: And how are you doing with all of
this?
I said: Well, I am doing fine. I don't feel any different, and I
don't think I think any different. It is almost as if the number is
meaningless.
He looked at me seriously and said: You are in serious major denial.
This is a big deal. This is a major milestone.
[[Page S2110]]
Well, ever since he said that, I have been wondering, gosh, is that
little pain in the right shoulder the beginning of more problems and so
forth?
It reminded me of the situation we faced here when others have said
the debt problem we have is not a major problem or that we don't have a
spending problem. It reminded me of the minister who said: You have to
be in major denial.
Year after year, we are spending a lot more money than we take in,
and there is no end in sight to that. Mandatory spending alone on
programs such as Medicare, Medicaid, and Social Security is projected
to double in a few years' time. It is estimated each new child born
today will inherit $50,000 or more of debt, which they will need to pay
off as they grow, go through their education years, and become part of
our economy. They are going to be saddled with this ever-growing debt.
My three latest grandchildren, Grace, Charlie, and Avery, all young,
just a few years old, are inheriting a very significant amount of debt
which will saddle and stifle their opportunities to participate in the
American dream and enjoy many of the same opportunities many of my
generation have had.
Interest rates were held down by the Fed at historically low levels.
We might also be facing our day of reckoning. I had the opportunity to
speak with the Fed Chairman some time back. He indicated we are running
out of tools here at the Fed to address these problems. The people up
the street who handle the fiscal issues, not the monetary issues, need
to stand up and address the problem.
I think we all know we can only keep interest rates low for so long.
It is important to understand a 1-percent point increase in interest
rates would add over $1 trillion to the United States debt in a 10-year
period of time. These historically low rates are not going to stay
historically low forever. They are going to rise as investors lose
confidence in America's ability to pay off their debts in the future if
we keep plunging into the level of debt and deficit spending which has
been taking place here over the last several years. Eventually, we are
going to reach that tipping point, and when we reach that tipping
point, investors and consumers lose confidence. When that happens,
interest rates rise. When interest rates rise, it impacts our economy
in a very significant, negative way. All we have to do is look across
the Atlantic, in Europe, to see what is happening there to get a
glimpse of the crisis that can come with not dealing with the ever-
increasing debt and not taking the necessary steps over a period of
some time to put our country on a fiscal path to health.
I think most of us here know that we have to make some tough choices
and that it will require political will in order for us to address
this. We have been avoiding this for years, and we are going to face a
debt-induced catastrophe if we don't address it and address it soon.
So when you are faced with this kind of fiscal mess, what do you do?
Well, what families and businesses all across America have had to do
when they have faced these types of situations--sit down, create a
budget, and put themselves back on a path to balance and prosperity in
order to avoid the inevitable: a collapse of the family budget or the
business budget. Our communities and our States have had to do this. We
see this happening everywhere except in Washington. It is this body and
this administration that have refused to step forward, No. 1, to pass a
budget on which to guide our spending and, No. 2, to make the decisions
necessary to turn this economy around and begin to put us on a better
path toward a balanced budget.
Why a budget? Well, it helps us identify priorities. Sitting on the
Appropriations Committee, where agency heads and Secretaries come
before us and present their requests for the future fiscal year in
which we are making decisions, I ask each one of them: Do you have a
plan B?
They say: What do you mean by a plan B?
I say: if we continue down this path that is going to ever shrink
discretionary spending--whether it is for cancer or paving roads or
education or any other worthy project, there is going to be less money
if we don't address this spending problem, particularly if we don't
address mandatory spending.
I ask them: Have you looked at doing what every family has had to do
and what every business has had to do during these 4 years of tepid
growth, which just seems to linger and linger and linger? We still have
23 million people out of work. Have you looked at ways in which you can
make your spending and the parts of the budget you oversee more
efficient and more effective? Are there things you can cut? Are there
programs you can eliminate that no longer are effective or perhaps
shouldn't have been there in the first place? Are there things you
would like to do but without the resources are not able to do at this
time?
You know, if a family is faced with lower revenue--dad's salary has
been cut or mom has lost that second income or for whatever reason--and
they are having a hard time making payments--education for the
children, mortgage payments, and so forth--the family has to say: You
know, we are going to have to look at how we spend money, and we are
going to have to cut back. Maybe we won't be able to go to Disney World
this year as we had planned. Maybe we will need to buy a tent and go to
the State park or do something less expensive. And if they have kids
with a credit card: We are going to have to put limits on that or you
are going to have to scale back.
These are decisions every family has had to make. These are decisions
every business owner is faced with and has to deal with, and they are
doing that. But this is a decision that hasn't been made here.
Well, it has been 4 years--1,400-some days; I think 1,422 days and
counting--since this body, the Senate, has passed a budget which would
allow us to determine what our priorities are or at least give us a
guidepost as to how we are going to spend money. Four years since this
body has presented to the American people, who elected us to come here
and represent them, a budget and give them the transparency of how we
are spending their money.
Finally, after 1,422 days, after 4 years, we have a budget before us.
While I am pleased that is the case and I am pleased we are here
debating that, it is disappointing when we learn what that budget
offers.
One would think, after 4 years--and particularly after the 4 years we
have been through and the 23 million people unemployed or underemployed
and the rate of growth of this economy half of what it normally is--
that the budget being presented to us would take some steps toward
addressing our spending issues and would not incorporate $1 trillion or
more of increased taxes, which will simply go to more spending. How
could we possibly support a budget--being $16.7 trillion in debt--that
plunges us further into debt--a staggering increase in debt--and also
doesn't reduce spending? That is at least a step but nothing nearly
appropriate to what we are facing.
So this budget grows government. Let's not make any excuses. It grows
government by increasing spending, and it grows government by a massive
increase in taxes just after we have had one a few months ago, not
counting the massive increase in taxes that is going to occur beginning
in 2014 with the implementation of ObamaCare. When we add that up and
look at the cost of that, we face a dire circumstance. So one would
think a budget being offered to us would not increase debt by 42
percent but would address the real problem.
I know there has been a dispute about how much of the budget revenue
is increased taxes. Some say $1.5 trillion. Those who have presented
the budget simply say: Oh, no, it is only $1 trillion. Well, whether it
is $1.5 trillion or only--only--$1 trillion, it is $1 trillion in new
taxes on the American people after they just got hit with more than
$\1/2\ trillion 2 months ago and are going to get hit again with
another $1 trillion when ObamaCare fully kicks in. I mean, it just
defies credibility, and I think the investment community and consumers
and taxpayers all across America look at this and say: What in the
world are you doing?
What are the consequences of this? Well, the Heritage Foundation
indicates that the Senate Democrats' budget would cost over 8 million
jobs nationwide and 225,000 jobs in my own
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State over the next 10 years. They estimate that the budget would
reduce economic output by $1.4 trillion and reduce private domestic
investment by $820 billion. We certainly see the trend here, and the
trend is a negative consequence not a positive consequence.
So I think these statistics emphasize the fact that the entire
mindset behind this budget seems to be how we can find more revenue to
fund more government spending rather than how do we grow the economy.
Our goal ought to be to grow the economy, not grow an already bloated
government with more taxes to pay for more government spending.
This budget never balances the budget. We will never reach the point
our States have had to reach in balancing their budgets. The majority
of our States have had to pull themselves out of a hole, and they have
done so because many are constitutionally mandated by their own State
constitutions to balance that budget. Families have had to balance
their budgets, and businesses have had to balance their budgets. Only
the Federal Government doesn't seem to balance its budget and this plan
doesn't even attempt to get us there.
I have been coming to the Senate floor day after day after day this
year basically talking about the need for Republicans and Democrats and
the President to come together with a bold, credible, and enforceable
long-term plan to reduce our debt and put our country back on a path
toward growth and prosperity. We need to recognize that it will take
more than a quick fix. It is going to take more than this soap opera
drama of kicking the can down the road, extending the decisions we have
to make for yet another few months behind this, behind that, or
whatever. It is going to take the will to roll up our sleeves, stop
wasting our time and instead get to work on a plan that will deliver
real results for the American people.
To solve this dire situation and reduce dangerously high debt, I
believe we need a plan that includes three major things:
We need to reform the way we spend. We need to go through each
program at every agency and department and determine how we can do more
with less. My colleague from Oklahoma, Tom Coburn, already has taken
steps to triage our Federal Government's spending by identifying
programs that are ineffective, unnecessary, and overly duplicative.
We need comprehensive tax reform. The Joint Economic Committee has
heard witnesses from the left, from the right, from the middle,
nonpartisan, Republican, Democratic, Independents, and there is a
consensus: If we don't have comprehensive tax reform together with a
sensible, credible, long-term, enforceable deficit-reduction plan, we
will not pull ourselves out of this mess we are in.
The growth element of what we need comes through tax reform. Senator
Wyden and I, in a bipartisan way, have worked for years--he worked
years before that with former Senator Judd Gregg--on putting together a
plan. We are not saying it is the be-all, end-all, but it forms the
basis for a simplification of the Tax Code. It is revenue neutral, it
addresses our lack of competitiveness around the world in terms of our
corporate entities and businesses, it fixes rates at reasonable levels,
and it ought to be the basis for at least the discussion and moving
forward.
If we don't combine our spending discipline with comprehensive tax
reform, we are not going to have the element that will produce the
growth and revenue that will bring us closer to balance.
Finally--I talk about this all the time--let's have the courage to
address what we know is driving us into more and more deficit and will
prevent us, if we don't adjust it, from ever having a rational plan to
get us out of this situation, and that is mandatory spending.
Let me quote from the President's own bipartisan commission. They
said:
By 2025, revenue will be able to finance only interest
payments, Medicare, Medicaid, and Social Security. Every
other Federal Government activity--from national defense and
homeland security to transportation and energy--will have to
be paid for with borrowed money.
That is because our revenues will only pay for these few programs,
which are eating up all of our expenditures. So from cancer research to
education, from paving roads to air traffic control to meat inspectors,
national defense and homeland security, and everything the government
does that is an essential function for the Federal Government--all will
paid for with borrowed money.
Let me go back to their statement.
Debt held by the public will outstrip the entire American
economy, growing to as much as 185 percent of GDP by 2035.
Interest on the debt could rise to nearly $1 trillion by
2020.
That is just 7 years away. Returning to the quote:
These mandatory payments--which buy absolutely no goods or
services--will squeeze out funding for all other priorities.
So not only will the uncontrollable growth of mandatory spending
squeeze out funding for all other programs or priorities in our
country, but it will also jeopardize the safety net we have put in
place for retirees who have worked hard and put money aside to become
eligible when they retire for Social Security and Medicare and for
those who find themselves in a situation where Medicaid is a necessary
safety net.
We have always taken pride in being a country that is compassionate.
We have been a place where, if you work hard, you can earn a good
living, you can raise a family, and in later phases of life you will be
able to rely on the safety net of health and retirement programs you
have invested in. But if we don't act on mandatory spending, if we
don't act on Medicare and Medicaid and Social Security, we will all but
ensure the demise of these much needed programs for future generations.
Failing to act and leaving our children and grandchildren with this
enormous debt burden is immoral.
We all know--or we ought to know by now--our current path is
unsustainable. Academics, economists, and business leaders from all
sides of the political spectrum repeat the same thing: Unless we make
the tough choices we have been avoiding for years, we are going to face
a debt-induced catastrophe and it is only a matter of time and the
clock is running down.
Congress and the President must summon the courage and the political
will to do the right thing and take the tough medicine now that will
heal this economy. What we have been doing for the last 2 years that I
have been here is basically looking at a chronic illness and saying:
Take two Advil; maybe you will feel better in the morning. That doesn't
work. We need the bold, the credible, and the enforceable plan that
will put us on the path to prosperity, and it must include spending
discipline, comprehensive tax reform, and mandatory spending reform.
I am going to be offering up to five amendments to this budget. I
don't want to spend a great deal of time on this now. I will, for the
record, mention the five I am going to offer.
The first is a mandatory spending budget point of order. This would
be a point of order against any legislation that increases the net
level of mandatory spending at any time our gross Federal debt exceeds
100 percent of the economy or our GDP.
Numerous studies have said that when we reach 90 percent, we are at a
tipping point, and it becomes historically proven that it has a serious
negative impact on our economy. I have raised this to 100 percent to
allow a little room. This point of order will be in place and, if
passed, can only be overridden with 67 votes. This should force
Congress to think before we act.
Secondly, I am offering an amendment that is called debt transparency
legislation. One of my colleagues and a Member of the House of
Representatives, Luke Messer, has passed similar legislation in the
House with very significant bipartisan support.
It simply requires the Congressional Budget Office to report annually
an estimate of the cost per taxpayer of the deficit for any year that
the President's budget is projected to be in deficit. The American
people deserve to know this number, and this amendment would achieve
that.
I am also offering an amendment to repeal the 3.8-percent tax on
investment income. If we want to stifle the economy more, if we want to
prevent more growth and slow down this economy, throw in yet another
tax on the very people who are providing the capital and the
investment.
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We just talked about the medical device tax, which I have supported,
working along with Democratic cosponsor Senator Klobuchar from
Minnesota and many others who have joined us. It is an absolutely
irresponsible tax, simply a way for the administration to pay for the
costly health care law that taxes the very industry that is providing
us revenues, high-paying jobs, and helping our trade balance exported
quality products. This is crippling, and it is forcing some of these
companies to look overseas because of this egregious surtax on top of
all the other taxes they pay. So I support the amendment of Senator
Hatch and Senator Klobuchar to repeal that medical device tax.
I am also offering an amendment designed to fix our broken and
convoluted Tax Code. I see Senator Wyden has come to the floor. Senator
Wyden and Senator Gregg started a heroic project several years ago to
put together a comprehensive tax reform package. The work and the hours
spent in pulling this together is amazing. When Senator Gregg left the
Senate, he called me and he said: This is something I think you ought
to take a look at. Perhaps you can take my place and work with Senator
Wyden so it can be a bipartisan effort going forward. We have discussed
this with our colleagues. It should serve as the basis for tax reform.
As I said earlier in my remarks, we cannot address this problem
without spending discipline and comprehensive tax reform combined. All
the witnesses who have come before us in the Joint Economic Committee
have asserted this and enforced this; that it is the necessary element
to provide the growth to accompany the spending discipline and, added
to that, the mandatory entitlement reform.
Finally, an EPA amendment--which working with my colleague Senator
Manchin, a Democrat, again, a bipartisan effort--to deal particularly
with an EPA rule. I will not go into the details of that.
But these will be some of the amendments I will be offering in
conjunction with my colleagues to hopefully make this budget a better
piece of legislation.
To conclude, it has been 4 years since the Senate has passed a
budget. The plan before us, in my opinion, has not been worth the wait.
It will not help generate more jobs for the more than 23 million
Americans who are either unemployed or underemployed. It will not
improve this slow economy. It will not save Medicare and Social
Security from going broke. It will not produce a path to bipartisan
comprehensive tax reform. It will not ever balance the budget. It will
not help hard-working Americans get back to work and get ahead in this
life. We can do better than this.
After 4 years of inaction, the American people deserve better than
this plan. The American people elected a divided government. It was not
a mandate for either party. It is a challenge, a challenge all of us
need to accept.
So let us act now. Let us summon the courage to stand and work
together on a truly balanced plan--not one that calls for ever more
spending and ever higher taxes but one that puts in place real reforms.
The first step is passing a credible budget. Sadly, in my opinion,
this budget doesn't match the need. Hopefully, we can make the
adjustments for this to put us on that path to prosperity.
I yield the floor.
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. Mr. President, I yield myself 10 minutes off the
resolution.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mrs. MURRAY. Mr. President, we are having this debate in hopes of
ultimately reaching a fair and bipartisan budget deal. We all know that
is not going to be easy, so the least we can do is get our facts
straight. It is kind of disappointing to see that rather than engaging
in a productive conversation, some of our Republican colleagues prefer
to launch some pretty inaccurate attacks. I would like to take just a
moment to correct some of those inaccuracies so we can focus on the
urgent task at hand.
Some Republicans continue to claim the Senate budget includes a $1.5
trillion tax hike. I talked about this last night, but I wish to make
it clear again. This is not true. Here are the facts:
Of the $975 billion in new revenue from those who can afford it the
most, $480 billion is matched with responsible spending cuts to fully
replace sequestration, $100 billion goes toward targeted, high-priority
infrastructure repairs and job training to help boost our economy and
put Americans back to work. The rest goes to reduce the deficit. But,
unfortunately, rather than seriously considering the credible path we
have presented in our budget plan, some Republicans have decided to
play some games with these numbers and are not telling the truth.
Instead of subtracting the sequestration replacement portion and the
investment package from that $975 billion in total revenue, they are
trying to say we should add it all together. They are taking one side
of the ledger, combining that with the other side of the ledger, and
coming to a conclusion that makes absolutely no sense. It doesn't make
sense. You don't have to take my word for it. Fact checkers and
reporters have called this claim false. They have called it a step too
far. The Washington Post fact checker even gave it two Pinnochios.
Republicans have also made the argument that this budget actually
only includes $300 billion in deficit reduction. That distorts the
facts. It is not true, and it is inconsistent actually with what
Republicans have claimed in the past.
Our budget includes 1.85 in deficit reduction, evenly divided between
responsible spending cuts and new revenue. That revenue comes from
closing loopholes and cutting wasteful spending from a Tax Code that
has been skewed toward the wealthiest Americans and biggest
corporations. But some Republicans say that because part of what we are
doing is replacing sequestration with smarter deficit reduction, that
this somehow diminishes the savings.
I actually find this kind of interesting because I served on the
Joint Select Committee on Deficit Reduction when Republicans and
Democrats discussed ways to replace sequestration, which was, of
course, well after sequestration had been signed into law. We didn't
reach an agreement because Republicans refused to include revenue. But
we did agree then that deficit reduction to replace sequestration was
deficit reduction. In fact, my colleague Senator Toomey put forward a
plan to replace sequestration--to replace sequestration that he said
would have ``reduced our deficit by $1.2 trillion.''
I find it odd that some Republicans were willing to count replacing
sequestration as deficit reduction when they were putting forth plans
to do it, but they will not treat the Senate budget the same way,
especially since bipartisan groups, including Simpson-Bowles and
Domenici-Rivlin and the Committee for Responsible Federal Budget, all
used the same starting point that the Senate budget does. Like us,
these groups knew sequestration was not deficit reduction. It was there
to trigger deficit reduction that would come from replacing it. That
was the whole point.
In fact, the Center on Budget and Policy Priorities noted that the
Senate budget uses the appropriate starting point:
``Bowles and Simpson received no criticism when they did
the same thing for their new budget plan of a few weeks
ago.''
I didn't hear any Republicans complaining then. This just goes to
show that, sadly, some of our Republican colleagues appear more
interested in politicized attacks than serious consideration of our
plan. The American people deserve better. They deserve better. They
want an honest conversation. That is what we are trying to have with
the credible approach we put forward.
Finally, I wish to strongly dispute the criticism I have heard that
Democrats somehow don't take reducing our deficit and debt seriously.
Despite what you may have heard, Democrats care deeply, as we both
know, about restoring our Nation's fiscal health. We think it would be
absolutely wrong to pile up unsustainable debt and hand it to our
children. That is exactly why the Senate budget presents a serious,
credible, and sustainable approach to getting our debt and deficits
under control.
Experts on both sides of the aisle have generally come together
around a
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few principles for a responsible deficit reduction plan. The Senate
budget builds on the work of the last 2 years to meet each of those
benchmarks.
In 2010, the Simpson-Bowles fiscal commission recommended finding
roughly $4 trillion in deficit reduction over 10 years. This has now
become the benchmark of other serious bipartisan proposals. The Senate
budget builds on the $2.4 trillion in deficit reduction that has
already been done in the last 2 years since Simpson-Bowles, with an
additional $1.85 trillion in new deficit reduction, for a total of
$4.25 trillion in deficit reduction since the Simpson-Bowles report.
What the Senate budget does is it takes us the rest of the way to
that $4 trillion goal and actually beyond it. Following the
recommendations of Simpson-Bowles and the Senate Gang of 6 plan, the
Senate budget importantly reduces the deficit to below 3 percent of GDP
by 2015 and keeps it well below that level for the rest of our 10-year
window in a responsible way. It pushes our debt as a percentage of the
economy down, moving it in the right direction, as we have been told is
an important goal.
So our budget reaches these benchmarks the way the American people
have consistently said they want it done and the way economists and
experts across our political spectrum have recommended--with an equal
mix of responsible spending cuts across the Federal budget and new
revenue raised by closing loopholes and cutting wasteful breaks that,
by the way, primarily benefit the rich.
This budget responsibly cuts spending by $975 billion. As a member of
the Budget Committee, the Presiding Officer knows we made some pretty
tough choices to get there.
We think every program, including the ones that we know are
important, needs to be wringing out the waste and trimming fat and
reducing costs so our taxpayers get that benefit. So $500 billion of
our deficit reduction comes from responsible savings on the domestic
spending side, including, by the way, and I remind all, $275 billion in
health care savings that we do in a way that does not harm seniors or
families.
There are no sacred cows. We have put everything on the table. But we
do it in a responsible way to preserve and protect and strengthen
programs such as Medicare and Medicaid that the American people support
as well. Our budget saves $240 billion by carefully and responsibly
reducing defense spending while giving the Pentagon enough time to plan
and align the reductions to time with the drawdown of our troops from
overseas. The remainder of the savings, $242 billion, comes from
savings on interest payments due to lower debt.
Taking the balanced approach the American people have consistently
called for, our Senate budget matches those responsible spending cuts
with $975 billion in new revenue, which is again raised by closing
loopholes and cutting unfair spending in the Tax Code while locking in
tax cuts for the middle class and low-income working families so we
protect them from paying anymore.
There is bipartisan support for reducing the deficit by making the
Tax Code more fair and efficient. During the fiscal cliff negotiations,
Speaker Boehner proposed that we reduce the deficit by $800 billion by
closing what he called special-interest loopholes and deductions. So
the Senate budget takes him up on that. Every bipartisan group that has
tackled this issue in a serious way recommended a lot more revenue than
the $600 billion raised from the wealthiest Americans in the yearend
deal.
If our budget passes, the total deficit reduction since the Simpson-
Bowles report will consist of 64 percent spending cuts, 14 percent tax
rate increases on the rich, and 22 percent new revenue from closing
loopholes and cutting wasteful spending in the Tax Code. That is a
responsible approach. It is a balanced and fair approach. It is the one
endorsed by bipartisan groups and experts and it is one that is
supported by the vast majority of the American people.
I want to say this again. Here are the facts. Our budget does not
include a $1.5 trillion tax hike. It does raise $975 billion, again
from closing loopholes and cutting wasteful spending in our Tax Code.
It reduces the deficit by $1.85 trillion when analyzed the same way
Republicans have analyzed their own proposals. And Democrats do care
deeply about our country. We do want to reduce our debt and deficit,
which is exactly why we have put forward a responsible proposal to put
our debt and deficit on a downward sustainable path. As we continue
this debate over the next day I urge my Republican colleagues to stick
to the facts. Let's end the misinformation. Let's work together on the
job the American people want us to focus on and get a comprehensive
budget deal and get our country back on track.
Mr. President, I yield 10 minutes off the resolution to Senator
Wyden.
Mr. SESSIONS. Mr. President, will the Senator yield for a question? I
will not insist on an answer but I wish to raise something.
Mrs. MURRAY. If the Senator would withhold, because we have two
Senators waiting to talk. I will be happy to answer that. Can we let
two of them go on our time?
Mr. SESSIONS. You have the time. That will be fine. Thank you.
Mrs. MURRAY. I yield 10 minutes to Senator Wyden and 35 minutes to
Senator Levin.
Mr. LEVIN. If I can ask Senator Wyden to yield, that 35 minutes will
be allocated by me among a number of Senators on this side.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Oregon.
Mr. WYDEN. Mr. President, when we began the budget debate in Senator
Murray's committee last week, I said that Senator Murray's challenge
gave new meaning to the idea of playing a tough hand. Many thought her
task was essentially ``Mission Impossible.''
The fact is, for all of us who know Senator Murray well, she has
spent her whole life coming up with solutions to those matters that
people said were ``Mission Impossible.'' She spent her whole life
coming up with accomplishments that actually solve problems. I commend
Senator Murray for all of her work on this matter. I think it is very
clear that when we get the kind of bicameral, bipartisan agreement that
addresses the major concerns we are debating here on the floor, it is
going to be in no small measure because Senator Murray continued to
reach out to all sides. I want her to know how much I appreciate that.
I think we all understand these are complicated issues. At the same
time, the challenge of coming up with a bipartisan agreement here is
not rocket science in terms of identifying what the issues are. There
are two issues here. One of them is taxes and the other is Medicare.
The two of them in fact are inextricably linked in many respects,
because I have heard some on the other side of the aisle say I will
look at ways to reform taxes if colleagues on the Democratic side will
look at ways to protect Medicare and at the same time hold down its
costs. We have heard other Senators say the reverse. So these issues
are inextricably linked.
One of the reasons I support this budget this evening is that I think
this budget provides significant space for Democrats and Republicans,
as this process goes forward, to produce bipartisan solutions on those
two issues, the tax question and the Medicare issue, in the days ahead.
Let me take a few minutes. Senator Coats talked about our bipartisan
efforts. I have had a chance for the last 5 years to work with two very
thoughtful, conservative Republicans--Senator Coats and our former
colleague Senator Gregg. Senator Begich and I have been part of a
bipartisan team that is, in effect, seeking to modernize some of the
principles that a very big group of Democrats and Ronald Reagan agreed
to in the 1980s, which is to clean out some of these outlandish
special-interest tax breaks.
I see my good friend Senator Levin tonight. He is going to outline
just some of those outlandish tax breaks. We ought to clean them out
and use a portion of those dollars to hold down the rates and keep
progressivity. In the 2 years after Democrats and Republicans did that
in the 1980s, the country created millions of new jobs. No one can say
that every one of them was due to that tax reform effort, but it
certainly helped.
We had Senator Enzi on the floor earlier this evening. I have been
working with him on something that I think has been missed in the tax
reform debate, and that is Senator Enzi has said
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when are people going to start talking about the transition rules you
would need to actually implement the tax reform plan because today in a
global economy--and Senator Murray and I come from a part of the world
that is so trade sensitive--here we have Senator Enzi talking about
something very practical that ought to be very attractive to the most
progressive Member of the Senate and the most conservative Member of
the Senate. Under the Murray proposal these are the kinds of ideas we
should be looking at in the days ahead.
Let me now turn, if I might, to the Medicare issue. Again, we all
understand it is right at the heart of this when Senator Murray and
Congressman Ryan and all those who are going to be in a bipartisan
conference are negotiating. I continue to believe it is critically
important to protect the Medicare guarantee, something I have battled
for since the days when I was codirector of the Oregon Gray Panthers,
and we can do it in a way that will hold down costs. This is another
area where Senator Murray has given us a chance to look at some of the
solutions that could win support on both sides of the aisle. I will
touch on them briefly.
For years now we have had advocates on all sides of the political
spectrum talk about the value of merging Part A, which is the hospital
portion of Medicare, with Part B, the doctors and outpatients part of
the program. Here is a chance to save billions of dollars while also
helping vulnerable seniors hold down some of their out-of-pocket
expenses. It is there for the doing under the Murray budget. I think we
can forge bipartisan support for it.
Let me move on now to the question of chronic care. This is where
more than 70 percent of Medicare costs go, for those who are suffering
from heart and stroke and cancer and diabetes. The accountable care
organizations, which are an important part of the Affordable Care Act,
are clearly going to help with respect to how we look to treat this
population. But it is not going to lift all the boats. There are a lot
of very effective plans and group practices around the country that are
going to give us the opportunity to put in place integrated, effective
plans to help the most sick among us. We ought to pursue it. The Murray
budget will give us that opportunity.
I will close simply by saying there are some very good ideas for
promoting Medicare quality and holding costs down, which cost very
little, such as the approach Senator Grassley has given me the chance
to partner with him on, that would open for the first time the Medicare
database so that we would get a sense of what Medicare was paying
various doctors and providers for various services.
I know colleagues are waiting to speak. I will wrap up by saying that
on the biggest challenges of our time, which I think come down to two
issues, taxes and Medicare, the Murray budget gives us a chance to come
together in a bipartisan way. We are not going to get it all done,
obviously, this week. But we are going to have a chance to do it and I
think in both of these areas, taxes and Medicare, there are Senators on
both sides of the aisle who can pick up on this budget and find a way
to help Senator Murray and others who are going to participate in these
discussions get us to the solutions we need that will strengthen our
economy and protect our people.
I yield the floor.
The PRESIDING OFFICER. The Senator from Michigan.
Mr. LEVIN. Mr. President, first I commend Senator Murray and the
Budget Committee for the plan they have presented to us. It represents
an enormous step forward on an issue of huge significance to American
taxpayers. It is a step toward balanced deficit reduction.
An important part of balanced deficit reduction is reducing the
deficit without severely damaging important protections for and
investments in American families. One way to do that is by ending
unjustified tax loopholes and ending the damage they have inflicted on
our budget. Senator Murray's summary of the Foundation For Growth, the
budget plan before us, refers to ``the sheer magnitude of the revenue
lost to off-shore tax abuse, wasteful and inefficient loopholes, and
other business tax breaks.''
Many Senators have focused on this issue over the months and the
years. A number of them will, I expect, be joining me on the floor over
the next few minutes. For many years as chairman of the Permanent
Subcommittee on Investigations I have focused on the maze of offshore
schemes and complex gimmicks that are concocted to allow a privileged
few to avoid paying the taxes that are rightfully owing.
Our subcommittee has, on a bipartisan basis, filled volume after
volume with damning detail on how these schemes work and the damage
they cause. As Senator Murray and the Budget Committee have pointed out
in their blueprint, we are at a moment in history when we can remove
this blight. The pressures on the Federal budget and the threat to
economic growth and prosperity that they represent require action. We
must close these loopholes. The relentless arithmetic of our budget
situation compels it; fairness and justice demand it.
We come to the floor today in support of the revenue provisions in
the budget resolution before us. We are going to outline the ways for
ending these tax avoidance schemes, the preposterous contortions that
too many corporations and wealthy individuals employ to avoid paying
taxes. We will illustrate the huge loss in Federal revenues, the
resulting rise in deficits from these contortions, and will show how
that loss has contributed to a shift in the tax burden from
corporations and the wealthy to middle-class families and small
businesses. This is a shift that has occurred largely without the
notice or the approval of the American public. We are going to
demonstrate how closing these loopholes is integral to any balanced
deficit reduction agreement that is built on the common good.
The case for additional revenue and for closing tax loopholes as a
source of that revenue is overwhelming. Serious deficit reduction
requires more revenue, as everybody from the Simpson-Bowles Commission
to the Domenici-Rivlin task force to the Concord Coalition to Fix the
Debt, has recognized. They have rightly concluded that without
additional revenue, the deficit reduction numbers simply do not add up.
Republicans have insisted that the discussion of revenue as part of our
deficit-reduction approach is finished.
The other day Speaker Boehner claimed, ``The talk about raising
revenue is over.'' He is mistaken. Our effort is picking up steam.
These Republican protests cannot erase the fact that Federal revenue
remains significantly below its historic average as a percentage of the
gross domestic product of our economy, and that revenue is, and under
current trends will continue to be, below the levels we have needed in
the recent past to balance the budget.
In particular, the loss of corporate tax revenues is an ongoing cause
of deficits. At a time when corporations enjoy record profits, the
highest in half a century, revenue from corporate income taxes has
fallen off as a percentage of our taxes collected.
In 2006, corporate tax revenue made up about 15 percent of all
Federal revenue. In 2012, it had fallen to 10 percent. Somebody has to
pick up the slack. In this case it has been average American families.
Why is corporate revenue a shrinking share of our Treasury even though
the U.S. corporate tax rate, at 35 percent, is one of the highest in
the developed world? It is because the top tax rate doesn't tell the
story. While our tax rate at the upper limit is 35 percent on
corporations, the average U.S. corporate taxpayer's actual tax rate was
just 12 percent in 2011, which is the lowest in generations.
A recent study by two think tanks found that 30 of our largest
corporations with combined profits of more $160 billion paid no income
tax, zero, from 2008 to 2010.
The Permanent Subcommittee on Investigations, which I chair, has
outlined in great detail the black magic that these corporations employ
to make their tax bills disappear. One major culprit is offshore tax
avoidance. This is hardly a new problem, but it is receiving attention
like never before--perhaps because it is simply too big to ignore any
longer.
This recent edition of The Economist--just a few weeks ago--pointed
out in its lead story and on its cover that tax haven abuse is now a
$20 trillion problem for the global economy.
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That is $20 trillion, not billion. They also have a special report on
this offshore finance. The headline here--and it is an eye-popper, I
hope--is that ``The Missing $20 Trillion--How To Stop Companies And
People Dodging Tax.''
The Permanent Subcommittee on Investigations has been digging into
these abuses for years. Last year a subcommittee report outlined how
three U.S. companies--Apple, Google, and Microsoft--had used offshore
gimmicks to avoid taxes on almost $80 billion in profits. Much of this
tax avoidance stems from manipulation of intellectual property and
other intangibles. Companies develop valuable knowledge within the
United States, often using tax credits, grants, and other Federal
support. They then transfer that valuable property under various legal
schemes to offshore subsidiaries at bargain basement prices, thereby
shifting the profit that this valuable property generates overseas
where it is shielded from taxes.
Other offshore schemes involve pretzel-like twisting of tax laws. For
example, the subcommittee found that Hewlett-Packard employed such a
gimmick to bring home money that was held offshore--bring it back to
the United States--without paying the required taxes. Here is what the
law requires: When profits are brought back to the United States, the
profits are taxed. The IRS allows an exemption for very short-term
loans from offshore subsidiaries to their domestic parent. Hewlett-
Packard exploited that exemption by concocting a rotating series of
alternating loans from a pair of offshore subsidiaries to make billions
of dollars in what should have been taxable repatriated income appear
to be short-term loans exempt from taxation. This is a gimmick that is
so blatant that even some of Hewlett-Packard's accountants questioned
it.
Our subcommittee found that Hewlett-Packard used this offshore cash--
used it here--shielded it in taxes to help run its U.S. operations
during the 2010 fiscal year. To quote from the subcommittee's
description:
There does not appear to be a gap of a single day during
that period where the loaned funds of either BCC or CHCC--
The two offshore subsidiaries in question--
were not present in the United States. Moreover, a similar
pattern of continuous lending appeared to be occurring for
most of the period between 2008 and 2011.
Now they are talking about short-term loans--which I believe is 30
days or less--but they are supposed to be exempt from taxes when they
are lent from an offshore subsidiary back to the parent here in the
United States. This has been going on for years without a gap by using
a gimmick that they found in the Tax Code, which is egregious. It is
time to act.
Senator Whitehouse and I introduced a Cut Unjustified Tax Loopholes
Act not too long ago. Our bill would help address some of these tax
schemes, and others as well. It is a powerful weapon in our deficit-
reduction arsenal if we will use it.
Today a coalition of more than two dozen national public interest
groups, as well as dozens of State and local organizations, released a
letter urging the Senate to adopt our Cut Loopholes Act.
Mr. President, I ask unanimous consent that this letter be printed in
the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
March 21, 2013.
Dear Senator, We write to ask you to join as a cosponsor of
the Cut Unjustified Tax Loopholes Act (S. 268), introduced by
Senators Carl Levin (D-MI) and Sheldon Whitehouse (D-RI).
This bill would close a myriad of corporate tax loopholes
that serve no public purpose and would raise at least $190
billion over ten years. We urge the Senate leadership to
include the provisions of this bill in any budget deal struck
this year. The legislation tackles offshore tax loopholes
that allow and even encourage many large U.S. companies to
shift U.S. jobs and profits to offshore subsidiaries.
Corporations that benefit from all of the advantages of doing
business here are able to use creative tax planning to avoid
paying taxes on income legitimately earned in the United
States.
As federal revenues from corporations hover at multi-
generational lows, cracking down on offshore tax abuses
should be at the top of the Congressional ``to do'' list. The
Senate Permanent Subcommittee on Investigations has estimated
the cost to taxpayers of tax-avoidance schemes involving tax
havens at $100 billion annually. New estimates put the amount
of lost revenue as high as $150 billion: $90 billion from
corporate tax avoidance and $40-$70 billion from individual
tax evasion. Tax haven abuse is widespread: at least 83 of
America's top 100 publicly traded companies have subsidiaries
in offshore tax havens, according to the GAO. Some of these
subsidiaries are nothing more than P.O. boxes. In fact,
18,857 corporate `headquarters' are registered at one modest
five-story building in the Cayman Islands.
This is also a jobs problem. At a time when far too many
Americans are facing unemployment, our tax code is rewarding
U.S. corporations for moving and operating abroad rather than
in the U.S. It allows corporations to immediately deduct some
of their expenses for moving and operating those overseas
facilities even though the companies can defer U.S. taxes on
the offshore profits indefinitely. The CUT Loopholes Act
would promote investments in American jobs by removing some
of these incentives.
The non-partisan Congressional Research Service recently
found that U.S. multinational corporations reported
``profits'' in offshore tax havens that far-exceeded the
entire economies of those tax havens. For example, in 2008,
U.S. multinational corporations' reported profits in Bermuda
and the Cayman Islands exceeded 645% and 545% of those tax
havens' GDPs, respectively. After surveying the multinational
corporate profits reportedly from tax havens, that report
found ``these numbers clearly indicate that the profits in
these countries do not appear to derive from economic
activities related to productive inputs or markets, but
rather reflect income easily transferred to low-tax
jurisdictions.''
Here is an example of how these loopholes work. A recent
investigation by the Senate Permanent Subcommittee on
Investigations found that Microsoft avoided $4.5 billion in
federal income taxes over three years by using sophisticated
accounting maneuvers to artificially shift its income to tax-
friendly Puerto Rico. The company sold certain intellectual
property rights to its Puerto Rican subsidiary. Now the
parent company pays that subsidiary 47% of the revenue
generated from its American sales despite the fact that its
products were developed and sold in the U.S.
Businesses should compete based on the quality of the
products and services they offer, not on the cleverness of
their tax attorneys in exploiting loopholes like these. Tax
haven abuse by large multinational corporations puts small
businesses -- and even large domestic businesses -- at a
competitive disadvantage in the marketplace. Along with
individual filers, they must shoulder the extra tax burden
through higher taxes, a reduction to public services, or a
larger share of the federal. A 2012 U.S. PIRG report found
that the average extra tax burden shifted to just one
ordinary taxpayer due to tax haven abuse adds up to $426 per
year. If small businesses were to make up for the revenue
lost just from the corporate abuse of tax havens, each small
business in America would have to pay $2,116. It is time for
Congress and President Obama to correct this imbalance and
make sure multinational corporations are contributing their
share.
Offshore tax loopholes create winners and losers. The
winners are multinational corporations, usually in financial
services, high tech, and pharmaceutical industries. The
losers are those businesses who stay here in the U.S. and
those who can't afford to hire expensive tax planners and
lobbyists. Those on the losing end of these loopholes include
retailers, small businesses, and ordinary taxpayers, who are
forced to pick up the tab for tax haven abuse.
Due to the substantial loss of revenue, governments at all
levels, here and around the world, cut programs and jobs that
are critical to economic recovery and growth. We are finally
seeing international bodies such as the European Union, the
G-20 and the Organization for Economic Cooperation and
Development and government leaders from U.K. to India taking
action. The United States should be leading these efforts,
not following and certainly not ignoring the fact that these
stateless corporations are not going to act until we
eliminate these loopholes for good. Additionally, by closing
these corporate tax loopholes we send a message around the
globe that corporate tax avoidance is unacceptable whether it
be in the developing or developed world.
As Congress looks for ways to reduce the federal deficit
and debates tax reform proposals, members should start with
the elimination of these loopholes, which could raise as much
as $1.5 trillion in revenue over the next ten years. Policies
that would close a number of the most egregious of these
offshore tax loopholes are included in the Cut Unjustified
Tax Loopholes Act (S. 268). The Levin-Whitehouse bill would
end incentives that encourage the offshoring of jobs and
profits.
Diverse constituencies, including small business, labor,
faith, and public interest groups support closing these
loopholes. We urge you to stand with taxpayers by joining as
a co-sponsor of the Cut Unjustified Tax Loopholes Act and
urging your leadership to close these loopholes as part of
any budget agreement made in the next year.
Sincerely,
Action Aid USA
Alliance for a Just Society
[[Page S2116]]
American Federation of Labor and Congress of Industrial
Organizations (AFL-CIO)
American Sustainable Business Council American Friends
Service Committee
Business for Shared Prosperity
Center of Concern
Center for Effective Government
Citizens for Tax Justice
EG Justice
Financial Accountability and Corporate Transparency
Coalition
Foreign Policy In Focus
Foundry United Methodist Church
Friends of the Earth US
Global Financial Integrity
Jubilee USA Network
Main Street Alliance
Maryknoll Office for Global Concerns
New Rules for Global Finance
Presbyterian Church (USA)
Public Citizen
Service Employees Union International (SEIU)
Tax Justice Network USA
TransAfrica
U.S. Public Interest Research Group (PIRG)
State/Local Organizations
Arizona PIRG--AZ
Jubilee San Diego--CA
California PIRG--CA
Nicaragua Center for Community Action (NICCA)--CA
Resurrection Lutheran Church--CA
Colorado PIRG--CO
Connecticut PIRG--CT
Pax Christi Catholic University of America--DC
Foundry United Methodist Church--DC
Florida PIRG--FL
Georgia PIRG--GA
Georgia Rural Urban Summit--GA
Georgia Fair Share--GA
9 to 5 Atlanta--GA
MoveOn Atlanta--GA
Atlanta Jobs with Justice--GA
Provincial Council of the Clerics of St. Viator
(Viatorians)--IL
Illinois Maternal and Child Health Coalition--IL
AIDS Foundation of Chicago--IL
Autism Society of Illinois--IL
Union Church of Hinsdale--IL
American Bottom Conservancy Illinois--IL
Citizens Against Ruining the Environment--IL
Eco-Justice Collaborative--IL
Holy Cross International Justice Office--IN
Sisters of the Holy Cross Congregation Justice Committee
Notre Dame, Indiana--IN
Des Moines Chapter--Women's International League for Peace
and Freedom (WILPF)--IA
Iowa Annual Conference of the United Methodist Church--IA
Iowa Citizens for Community Improvement--IA
Iowa Move to Amend--IA
Green Dubuque--IA
Iowa Progressive Action Coalition--IA
Iowa Citizen Action Network--IA
Iowa Mainstreet Alliance--IA
Iowa PIRG--IA
Iowa Policy Project--IA
Maryland PIRG--MD
Maryland United for Peace and Justice--MD
Institute for Justice and Democracy in Haiti--MA
Jubilee Justice Task Force of the United Church of Christ--
MA
Jubilee Massachusetts--MA
Massachusetts PIRG--MA
Immaculate Heart of Mary Justice, Peace and Sustainability
Office--MI
Holy Innocents Episcopal Church--MI PIRG in Michigan--MI
Missouri PIRG--MO
Missourians for Tax Justice sub-committee of the MO
Association for Social Welfare--MO
Economic Justice Task Force--MO
Progress Now Nevada--NV
New Hampshire PIRG--NH
New Jersey PIRG--NJ
NJ Working Families Alliance--NJ
NJ State Industrial Union Council--NJ
NJ Save Our Schools March--NJ
NJ Main Street Alliance--NJ
NJ Citizen Action--NJ
New Mexico PIRG--NM
North Carolina PIRG--NC
Jubilee Oregon--OR
Oregon PIRG (OSPIRG)--OR
Pennsylvania PIRG--PA
Grey Nuns of the Sacred Heart--PA
Small Business Chamber of Commerce--SC
Texas PIRG--TX
Vermont PIRG--VT
Jubilee Northwest--WA
Fuse Washington--WA
Washington PIRG--WA
Hill Connections--WI
Madison Teachers Inc--WI
Wisconsin Alliance for Retired Americans--WI
Citizen Action--WI
Wisconsin Community Action Program--WI
Wisconsin Education Association Council--WI
Wisconsin PIRG--WI.
Mr. LEVIN. I see there are a number of my colleagues who have joined
me here in this effort so I will close with the following comment. Some
of the people argue that they will consider closing tax loopholes but
only if the resulting revenue is used to lower tax rates rather than
reducing the deficit. This position is unwise for two reasons. First,
the budget deficit is a significant problem for our country, and we
should address it. Senator Murray's budget wisely takes the view that
we need to act to reduce the deficit.
Second, the people who elected us overwhelmingly believe that reforms
to end these tax schemes, which I have outlined, should contribute to
deficit reduction. A recent poll shows that more than 80 percent of
Americans believe that revenue we recover from closing tax loopholes
should be dedicated to reducing the deficit, not to cutting rates.
Let's follow the path this budget resolution before us outlines:
spending cuts, yes, but prudent, carefully considered cuts that
preserve our most important priorities; Savings from reform of
entitlement programs, yes, but reforms to keep the faith with seniors
today and in the future. And, yes, revenue, revenue that ends the
privileges of an influential few who have for far too long enjoyed
unjustified tax breaks that boost corporate profits and the bank
accounts of the wealthy few at the expense of ordinary Americans.
Earlier today Senators Whitehouse, McCain, and I--a bipartisan
group--filed an amendment to the budget resolution suggesting the need
to close tax loopholes. Our amendment makes reference to ending
offshore tax abuses by large corporations. Our amendment provides that
at least some of the revenue generated must be used for deficit
reduction. This bipartisan amendment makes a strong statement on the
momentum that is building for balanced, commonsense deficit reduction.
There is a group of Senators who have come to the floor with me so we
can end these tax schemes and gimmicks. I thank Senator McCain, Senator
Whitehouse, and I thank my other colleagues who are here today for the
work they put into a very vitally important issue.
Mr. President, I believe Senator Whitehouse is ready to proceed.
Senator Whitehouse is my principal cosponsor on this amendment, along
with Senator McCain.
Mr. President, how much time do I have?
The PRESIDING OFFICER (Mr. Udall of New Mexico). The Senator has 24
minutes remaining in his name.
Mr. LEVIN. Is 9 minutes sufficient?
Mr. WHITEHOUSE. It is more than sufficient.
The PRESIDING OFFICER. The Senator from Rhode Island.
Mr. WHITEHOUSE. Mr. President, I thank Senator Levin for his
leadership on this issue. I am proud to be part of his Levin-Whitehouse
group in putting this together. If we boil down the discussions that we
are having back and forth about the budget, they come to a very simple
question; that is, can we use the money that is in tax avoidance, in
tax loopholes toward solving our sequester problem, our deficit
problem, and our debt problem?
The way this has been described so far is that there are spending
cuts. That is one part of the equation. The other part of the equation
is tax increases. That has been the way this has been framed. That
overlooks the third big piece of the problem, which is money that goes
out the backdoor of the Tax Code without ever coming into the U.S.
Government in revenues. I want to let people who are watching know--
because they probably won't believe it--what a colossal number that is.
We get $1.09 trillion in revenue out of the individual Tax Code. We
get $181 billion in revenue out of the corporate Tax Code. We give away
$1.02 trillion out the backdoor of the Tax Code for individual
deductions and loopholes. We give away $157 billion out the backdoor of
the Tax Code in corporate deductions and loopholes. The IRS estimates
that there is $385 billion which never even gets into the formula
because of what Chairman Levin was talking about: companies and
individuals who hide their revenue and income offshore so it never even
gets into the tax package. If we add it up, there is actually more
money lost through tax avoidance than there is collected in tax revenue
in this country.
When people talk about only the tax revenue and only spending cuts,
they are trying to hide a very big ball. That is the basic difference
between the Democratic proposal and the Republican proposal. We want to
take $975
[[Page S2117]]
billion, which is only 7 percent of all the money that goes out the
backdoor of the Tax Code, and use it toward ending the sequester and
balancing the budget. That is our proposal. The Ryan Republican
proposal is to take 41 percent of that money that goes out the backdoor
of the Tax Code and use every nickel of it to lower the high-end rates
for corporations and for wealthy Americans who pay the highest end
rates. They don't put a dime from this toward either the sequester or
deficit reduction. We cannot have that be the rule.
If we take this number, which is an annual number--the minimum is
right here, $1.02 trillion plus $157 billion. We do our budget over a
10-year span. These are annual numbers. That means in a 10-budget
horizon, we have at least $11.5 trillion going out the backdoor of the
Tax Code. If we allow for moderate growth in the economy, it is not
$11.5 trillion, it is $14 trillion. If we throw in the nearly $400
billion in offshoring, we are up to nearly $18 trillion--$18 trillion
that goes out the back door of the Tax Code.
By the way, although there are important middle-class deductions in
the middle of this, such as the home mortgage deduction, there is an
awful lot of nonsense and mischief in the tax expenditures that go out
the back door of the Tax Code. If we want to know why hedge fund
billionaires pay a lower tax rate than their chauffeurs and the
hospital orderly rolling his cart down Rhode Island hospital hallways
in the middle of the night, we can look at the mischief in the Tax Code
for the carried interest exception. If we want to know why corporate
jets, private jets get favored treatment, look at the accelerated
depreciation schedules in the corporate Tax Code. There is a lot of
mischief and monkeyshines that have been built into the Tax Code by
lobbyists for the wealthy and lobbyists for powerful corporations over
the years.
All we want to do--and what this fight is all about--is take $975
billion out of those trillions and trillions of dollars that go out the
back of the Tax Code and use it to get rid of the sequester and to
balance the budget. That is what we want to do. And what the
Republicans want to do is take 41 percent of that and use every
dollar--every dollar--to lower tax rates for the richest people. They
don't spend a nickel in all of that toward reducing the deficit or
toward ending the sequester.
This Tax Code spending--all the earmarks the lobbyists built into the
Tax Code over decades--is the Republican treasure trove. That is their
Ali Baba's cave. That is where all the goodies are, and they don't want
to spend a nickel of it either getting rid of the sequester or helping
with deficit reduction. They want all of the treasure in Ali Baba's
cave of special tax deals to stay with the big corporations and with
the wealthy in the form of lower tax rates. That is the entire debate
between our sides right now.
I think Chairman Levin, by putting forward this plan to take this
offshore hidden revenue and bring it into the discussion and use it to
help solve our sequester, use it to help support our economy, use it to
help reduce our deficit, is a very strong idea, so I am very pleased to
support him. I appreciate his leadership. I am delighted Senator John
McCain has joined us on this to make this a bipartisan initiative. They
show great leadership together, and I am delighted to join them.
With that, with my great appreciation to Chairman Levin, I yield the
floor.
The PRESIDING OFFICER. The Senator from Michigan.
Mr. LEVIN. First let me thank Senator Whitehouse. He has been a
leader in this effort for a long time. His support here is critical and
will really make a difference.
How much time do I have?
The PRESIDING OFFICER. There is 14 minutes remaining.
Mr. LEVIN. I yield 7 minutes to the Senator from Connecticut.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. BLUMENTHAL. Mr. President, I wish to add my thanks to the
chairman of the Armed Services Committee and the leader in this effort
to close some of these abusive and unnecessary and wasteful loopholes.
I also thank Senator Whitehouse and Senator McCain for their leadership
in this effort, which is about fundamental fairness.
Most importantly, let me thank Senator Murray for the hard work, the
courage, the strength it has taken to put together a budget that is
intensely complex, dealing with issues that are hugely challenging, and
craft a solution that presents a vision for the future of America that
is very distinct and different, as well as very preferable to the one
presented by the House budget. The House insists on a cuts-only
approach and absolutely refuses to consider new revenue. The solution
crafted by Senator Murray and her committee has opted for balance and
compromise--two words that unfortunately are too often missing from our
deliberative process.
Our budget achieves $1.85 trillion in new deficit reduction, with an
even mix of $975 billion of new revenue and $975 billion in responsible
spending cuts. That is a real achievement.
We are here today to talk about cutting loopholes, tax breaks,
giveaways to people who don't need them and corporations that don't
deserve them. Their existence undermines the fundamental fairness of
our Tax Code.
The fact that more money goes to tax avoidance than to tax revenue is
a fundamental, searing indictment of our Tax Code, and it is the reason
there is resistance to people paying their fair share. Again and again
and again, what I hear from citizens, from taxpayers, from residents of
the State of Connecticut is, I would be willing to pay my fair share as
long as others are required to do the same.
Fairness is at the core of our Tax Code. It is the reason why
voluntary compliance is so important and why it happens--because people
rely on its fundamental fairness.
The offshoring of profits and ending those offshore tax abuses that
have been described so eloquently by Senator Levin and Senator
Whitehouse is absolutely necessary to a sense of fairness in our Tax
Code. As important as the additional money is the sense of equity it
would bring to our Tax Code.
Likewise, fair and effective tax enforcement is critical. I know as
an enforcer of civil laws for 20 years as attorney general it is
important to a sense of fairness in our society, and effective
enforcement requires resources. It requires tightening rules relating
to tax shelter promoters; stiffening penalties for the aiders and
abettors--the ones who enable violations of our tax laws and tax
evasion; and modernizing Federal tax lien registration. We are fond of
saying in this body that the devil is in the details. Here, the devil
is in nonenforcement of those detailed regulations and rules that
require compliance.
Similarly, ending excessive corporate tax deductions or stock options
and closing some of the loopholes that apply to derivatives are
fundamental to fairness and to preserving a sense that everybody is
bearing a fair share of the burden. Those rules that presently permit
evasion and abuse must be ended. The consequences are huge because they
apply to the vision of the future that each of these rules and budgets
contemplate.
The wasteful tax loopholes mean losses in revenue, and those, in
turn, mean we must cut programs as a consequence. In my home State of
Connecticut alone--just to show some of the consequences of the House
or Ryan budget--47,000 seniors would pay more for prescription drugs
next year, and that means $828 for each of them, on average, more in
the cost of drugs in 2014 alone and more than $13,000 over the next
decade.
The House budget would cut $8.73 billion in funding Connecticut
receives for nursing care and other health care services for seniors
and the disabled, putting at risk tens of thousands of Connecticut
seniors who rely on Medicaid for their long-term health care needs.
I have sponsored the Bring the Jobs Home Act, which many others have
cosponsored, which would close that loophole for corporations that send
jobs and ship employment overseas. We need to bring those jobs back.
The House budget would double down on job-killing cuts to
infrastructure and research and economic development programs. The
Economic Policy Institute has found that these cuts would cost
Connecticut over 24,000 jobs in 2014 alone.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. BLUMENTHAL. Our economic recovery is fragile. Job-killing cuts
must be stopped.
[[Page S2118]]
I thank Senator Levin for his leadership on this issue.
I yield the floor.
The PRESIDING OFFICER. The Senator from Michigan.
Mr. LEVIN. Mr. President, first of all, let me thank Senator
Blumenthal for his tremendous work in this area.
I yield the remainder of my time, which I believe is 6 or 7 minutes,
to Senator Shaheen. Is that correct?
The PRESIDING OFFICER. That is correct.
The Senator from New Hampshire.
Mrs. SHAHEEN. Mr. President, I thank Senator Levin for the work he
has done to look at the tax loopholes that should be closed and to
bring attention to really the fairness we should have in our Tax Code.
I am here to join my colleagues in talking about the importance of
passing a budget that will address our debt and deficits and protect
middle-class families while investing in our future job growth. I
applaud Senator Murray for her leadership and the work of the Budget
Committee in bringing this document before us.
We have made significant progress in the last few years to get the
American economy growing, and we have taken real action to reduce our
deficits, but there is more we can do on both fronts, and the budget
before us addresses both of these urgent priorities in a responsible
way.
No one is questioning the need to address our debt and deficits. The
question is, Can we do this in a responsible way? Can we come together
in a way that protects our economic recovery?
Unfortunately, because of continued political stalemate, we have seen
the across-the-board spending cuts known as sequestration go into
effect. Now we need to come together to support a plan to address these
harmful automatic cuts because they are hurting small businesses. They
are having an impact on our economic recovery. They are forcing
furloughs of public employees--in New Hampshire, people such as our
Portsmouth Naval Shipyard workers and our air traffic controllers. They
are creating economic uncertainty that is putting our economic recovery
in jeopardy.
I have had the chance to travel around New Hampshire in the last
month or so and talk to companies that are concerned about the impact
of these automatic cuts. One of those companies I visited is called
Cirtronics, which is a manufacturing company in Milford, NH. The
company employs about 150 people, and it manufactures a diverse array
of products, from circuit boards, to medical equipment, to defense and
homeland security products. Cirtronics doesn't have any direct
government contracts, but many of its clients do. As a result, the
company is facing a lot of uncertainty under sequestration. According
to its CEO, Geraldine Ferlins, this uncertainty is getting in the way
of the company's growth. She said:
How do you plan without knowing how you will be affected?
You hear about how CEOs are hesitant to hire. This is why.
Another company in Salem, NH, called Micro-Precision Technologies is
a small, family-owned business with about 20 employees that makes
semiconductors used in the military, aerospace, medical, and
communications industries. About 80 percent of Micro-Precision's
business is with the Department of Defense. Sequestration has meant
that their orders are down about half for the month of January. They
had been planning to hire two new people, but unfortunately they cannot
do that because they are so uncertain about what is going to happen.
That is why we need a better approach to addressing our budget
situation. We need a plan that looks at all areas of our spending--at
our domestic, at our defense, at our mandatory programs--as well as at
revenues through tax reform. That is exactly the approach that was
taken by the Budget Committee in passing out the budget resolution that
is before us this week. That is why I supported it. It replaces the
harmful cuts under sequestration with a balanced mix of responsible
spending cuts as well as additional revenues. So instead of across-the-
board cuts, the budget makes targeted cuts to several areas. It cuts
health care spending without harming beneficiaries; it reduces defense
spending cuts, as we wind down our operations in Afghanistan; and it
results in reduced interest payments on our debt.
The budget also provides a balanced approach by ending, as Senator
Levin pointed out, the unfair tax breaks for the wealthiest and for big
corporations. I certainly applaud Senator Levin and Senator Whitehouse,
and I was really glad to hear that Senator McCain has joined them in
addressing these unfair tax breaks.
The budget does all this, and yet it still invests in our economy in
a way that allows it to grow. It provides much needed funding for our
aging transportation infrastructure. It creates an infrastructure bank
that is a bipartisan idea that allows us to get a greater bang for the
taxpayer buck. There is no doubt that we have to do more to fix our
debt and deficits, but we need to do it in a smart, responsible way.
That is what this budget does.
I certainly hope we will be able to come together this week to
replace the harmful cuts under sequestration with a comprehensive and
responsible plan for addressing our debt and deficit. That is why I
intend to vote for this budget--because it does exactly that.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SESSIONS. Mr. President, my colleague, Senator Murray, has
questioned the $1.5 trillion in tax increases that we have contended in
this legislation. I think it is there because there are two separate
reserve funds that would allow taxes to be increased by $500 billion
without legislation and would go through without a supermajority, to be
passed on a simple vote.
But our colleagues say that is not there, so I would offer into the
Record, Mr. President, a number of documents that support our view that
it is $1.5 trillion. Others can agree, disagree about it, as it is
presently written. I would offer that for the Record and our
explanation and why we think that is accurate. I ask unanimous consent
to have that material printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
An Explanation of the $1.5 Trillion Tax Hike in the Senate Democrats'
FY2014 Budget
When the Budget Committee minority staff began analyzing
Senate Democrats' FY 2014 budget last week, they discovered
that the plan called for not $975 billion in tax increases--
the amount that the majority claimed--but instead $1.5
trillion in tax hikes.
How is this possible? The answer lies in an arcane budget
tool known as a ``deficit neutral reserve fund'' (DNRF).
Because it is not possible to legislate on a budget
resolution, DNRFs were created to facilitate the passage of
subsequent legislation. They do this by removing future
barriers in the form of budget points of order.
To understand how DNRFs work, consider an example: A
Senator wants to introduce a piece of legislation to increase
funding for border security. Even if that bill's spending is
completely offset with new tax revenue, the legislation could
still be subject to a budget point of order. (Importantly, if
the new spending is offset with spending reductions
elsewhere, the bill would not be subject to that point of
order.) So if the Senator knows during consideration of a
budget resolution that he will be introducing border security
legislation at a later time, he can offer a DNRF to preclude
the possibility of that point of order being raised when his
bill is brought up.
Returning to the Senate Democrats' FY 2014 budget, the
majority asserts that their plan ``includes budget
reconciliation instructions . . . that [instruct] the Senate
Finance Committee to report legislation that will reduce the
deficit by $975 billion through changes to the tax code
alone.'' The budget also calls for an extension of the
certain refundable tax credits that were originally included
in the 2009 stimulus law (the American Reinvestment and
Recovery Act). After accounting for the extension of these
tax credits, the summary tables included with the budget
reflect a revenue level that is $923 billion higher than the
Congressional Budget Office current law baseline.
In a separate place in their policy document, Chairman
Murray proposes to ``[replace] sequestration using the
following equal mix of responsible spending cuts and . . .
$480 billion in new revenue . . .'' Finally, the majority
also proposes a $100 billion ``jobs and infrastructure''
package that ``is fully paid for by eliminating loopholes and
cutting wasteful spending in the tax code . . .'' [see Table
1]
It was initially assumed that this additional $580 billion
was simply a detailed breakdown of a portion of the $975
billion in tax increases called for through reconciliation,
but then Budget Committee analysts found two separate deficit
neutral reserve funds (Sec. 301 and Sec. 308) that exactly
[[Page S2119]]
match those respective amounts. Recall that the sole purpose
of a DNRF is to pave the way for legislation that increases
both taxes and spending. If the Murray budget intended for
the $580 billion to be a subset of the $975 billion, they
would have had no need to include these two DNRFs. In other
words, it must be assumed that the $580 billion is in
addition to the tax hikes called for in the reconciliation
instructions.
In total, therefore, the Senate Democrat budget clearly
calls for $1.503 trillion (the $923 billion from the tax
increases through reconciliation adjusted for the extension
of the refundable tax credits plus $580 billion) in tax
increases. The budget's authors have protested this
calculation, but if they wish to clear up the confusion,
surely they would agree to amend their resolution to
remove these two DNRFs and remove any possibility that the
funds will be used for additional future tax increases.
Table 1--Proposed Tax Increases in the Democrats' Budget
------------------------------------------------------------------------
Cite in budget
Proposed tax increases 10-year total document* and how
implemented
------------------------------------------------------------------------
``Includes $100 billion . . . $100 billion...... Top of page 8
paid for by eliminating ``Infrastructure'
loopholes''. ' Reserve Fund
(deficit neutral:
higher taxes for
higher spending).
``This budget replaces $480 billion...... Middle of page 21
sequestration using . . . $480 ``Replace
billion in new revenue raised Sequester''
by closing loopholes''. Reserve Fund
(deficit neutral:
higher taxes for
higher spending).
$975B reconciliation instruction $923 billion...... Middle of page 66
to Finance Cmte, less the Reconciliation
extension of stimulus Instruction
refundable tax credits.
---------------------------------------
TOTAL TAXES IN BUDGET....... $1.503 trillion ..
------------------------------------------------------------------------
* ``Restoring the Promise of American Opportunity'', Chairman Patty
Murray, March 13, 2013.
Appendix A--Detailed Citations in Chairman Murray's budget document,
``Restoring the Promise of American Opportunity
On page 66 is an explanation of the $975 billion
reconciliation instruction:
The Senate Budget calls for deficit reduction of $975
billion to be achieved by eliminating loopholes and cutting
unfair and inefficient spending in the tax code for the
wealthiest Americans and biggest corporations. It recognizes
that the Finance Committee, which has jurisdiction over tax
legislation, could generate this additional revenue through a
variety of different methods.
On page 55 is an explanation of the permanent extension of
the 2009 refundable tax credits:
[T]he Senate Budget builds on the middle class tax relief
that was legislated in the American Taxpayer Relief Act of
2012 (ATRA) and supports the permanent extension of the
American Opportunity Tax Credit... as well as the temporary
enhancements to the Earned Income Tax Credit and the Child
Tax Credit, all of which are scheduled to expire after 2017.
On page 8 is an explanation of the new revenue used to pay
for the new infrastructure spending:
Includes a $100 billion targeted jobs and infrastructure
package that would start creating new jobs quickly, begin
repairing the worst of our crumbling roads and bridges, and
help train our workers to fill 21st century jobs. This jobs
investment package is fully paid for by eliminating loopholes
and cutting wasteful spending in the tax code that benefits
the wealthiest Americans and biggest corporations.
On page 21 is an explanation of the new revenue used to pay
for the sequester replacement:
This budget replaces sequestration using the following
equal mix of responsible spending cuts and new revenue from
the wealthiest Americans, which builds on the precedent set
in the bipartisan year-end deal... $480 billion in new
revenue raised by closing loopholes and ending wasteful
deductions that benefit the wealthiest Americans and biggest
corporations...
Appendix B--Quote from Keith Hennessey (Stanford University), included
in the Washington Post article ``Mitch McConnell's claim that the
Democrats plan a $1.5 trillion tax hike''
Keith Hennessey, another former GOP budget expert who now
teaches at Stanford University... was especially suspicious
of the fact that reserve funds do not have limits--as is
sometimes the case in budget resolutions--and said it was
perfectly acceptable to argue that the budget ``also allows
for another $580 billion in tax increases to offset
additional spending increases she [Murray] assumes and
promotes aggressively.'' He added: ``If anything I'd argue
that even the $1.5 trillion number understates the tax
increases allowed by the Murray budget resolution. She's
requiring $975 billion in tax increases to reduce future
deficits, and allowing for unlimited amounts more to pay for
new spending. I find that terrifying.''
Mr. SESSIONS. I would like to say this to my chairman: I am willing
to concede the point if the chair would agree to amend the two reserve
funds so that they cannot be used to advance tax increases, and I would
cease making that argument and accept the fact that you have already
almost $1 trillion in new taxes.
So I would ask through the chair, is the Senator willing to amend
those two reserve fund languages so they cannot be used to add another
$500 billion in new taxes?
Mrs. MURRAY. Mr. President, let me just respond again. As the
Washington Post said in giving this concoction two Pinocchios, the
reserve funds the Senator refers to lie within there in order to
provide the $975 billion in revenues. So essentially what he is doing
is double-counting. So I would just say to the Senator through the
Chair that there is no need to have any kind of agreement here. That is
what our budget does. It is clear. It is what every expert has said.
Mr. SESSIONS. Mr. President, I thank the chair, and I assume, then,
that she refuses to clarify the ambiguity, the certain option to
increase taxes by another $500 billion. That could be eliminated simply
by making the suggestion I just announced. She is rejecting that. So I
think it is legitimate to assume that the intent of this reserve fund
is to raise taxes another $500 billion.
Secondly, with regard to the situation we have been discussing
concerning the sequester, I know the Senator said just a few moments
ago that the sequester is not deficit reduction. We can disagree about
that, but that was her opinion, apparently. I think it is inaccurate.
But my question to the Senator is, does your budget as now presented
on the floor eliminate the spending limits that are in current law
under the Budget Control Act and specifically the sequester portion?
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. Mr. President, as I have stated many times out here on
the floor--and our budget is very clear--we replace sequestration with
a balanced mix of spending cuts and revenues, exactly as we have
stated. There is no reason to misconstrue this. That is exactly what
our budget does.
Mr. SESSIONS. Well, I wouldn't misconstrue it. So it does eliminate
the sequester.
So then the next question would be, did you score the allowed
increase in spending of $1.2 trillion in your budget as increased
spending?
Mrs. MURRAY. Mr. President, this is a matter of semantics. We replace
the sequestration, very clearly, because it is very damaging to our
country.
Mr. SESSIONS. Well, your staff indicated that you could not double-
count that money, and if you eliminated the $1.2 trillion in sequester
limit and allowed $1.2 trillion more to be spent, you would not save
$1.85 trillion but approximately $700 billion on that decision alone.
Do you agree with your staff in their analysis?
Mrs. MURRAY. Mr. President, I assume we are taking this off the
Republican time.
The PRESIDING OFFICER. The Senator is correct.
Mrs. MURRAY. Mr. President, let me be very clear: We have put out a
budget that is credible. It is clear, and it is a good, solid approach.
I know we are playing with numbers here in terms of baselines. There is
no need to do that. We are doing what every single budget has done--
Simpson-Bowles and everyone else--replacing the sequestration. We are
clear that we have $975 billion in spending cuts, $975 billion in
revenue. We, within the context of that, replace the sequester cuts. We
take the $2.4 trillion that has already been done since Simpson-
Bowles--since Simpson-Bowles and we add another $1.85 trillion in
deficit reduction.
Mr. SESSIONS. One more question, then. Do you still stand by the
promotional material that went with the budget--and in the budget
document itself--that you have reduced the deficit over current law by
$1.85 trillion or isn't it a fact that eliminating the sequester
reduces that to approximately $700 billion in savings?
[[Page S2120]]
Mrs. MURRAY. Mr. President, over the baseline, which we are very
clear in what we are using--we are not hiding the ball, as he is trying
to do when he is mixing numbers here--we reduce the budget by an
additional $1.85 trillion, absolutely.
Mr. SESSIONS. Mr. President, I would just say that the Associated
Press disagrees. It is plainly inaccurate. Plainly, I asked that
question, over current law, did they count the sequester increase in
spending? And the staff admitted in our Budget Committee mark up that
it did not--that increased spending--and therefore we reduce the
deficit savings from $1.85 trillion to about $700 billion. There is
another $700 billion in gimmicks, so there is no reduction in the
deficit in this budget.
The AP reported:
. . . because Democrats want to restore $1.2 trillion in
automatic spending cuts . . .--cuts imposed by [the] failure
to strike a . . . budget pact--Murray's blueprint increases
spending slightly when compared with current policies.
The Hill says:
The Murray budget does not contain net spending cuts with
the sequester turned off.
So I will say this is a serious issue. We need to understand that the
sequester is law. It is not just a policy, it is in law. It is taking
effect right now. The deficit reduction proposed by this bill is not
$1.8 trillion but, in fact, zero.
I thank the Chair and would now recognize Senator Barrasso for 10
minutes, I believe, and Senator Alexander for 10 minutes. I thank them
for their patience.
The PRESIDING OFFICER. The Senator from Wyoming.
Mr. BARRASSO. Mr. President, within the last 20 minutes, I have heard
on the floor comments about the sequester. A previous speaker on the
Democratic side of the aisle said the sequester was hurting small
business and said the sequester was causing economic uncertainty.
Another Senator on the other side of the aisle made reference to the
Washington Post.
Well, I would draw the attention of this body to the Washington Post
of this morning, a front page story in the Washington Post of today,
Thursday, March 21: ``Health-care uncertainty weighs down small
firms''--not the sequester, uncertainty about the health care law.
``Requirements under 2010 law sow confusion, fear among businesses.''
That is the problem that is driving the fear and the anxiety and the
lack of new business starts and the failure to expand business.
In this article, there is a small business owner of an air-
conditioning firm in Richmond. He says:
In speaking to them, I am convinced--
He is talking about other customers, he is talking about other
businesses--
I am convinced that the primary reason we aren't seeing a
robust economic recovery is the uncertainty and costs
associated with this health-care law.
``Looming health-care changes hold back small businesses.''
Another quote from the article:
It's already hard out there right now. . . . This may be--
``This'': the health care law--
the straw that breaks the camel's back.
Not the sequester, not made-up confusion by the Democrats, it is the
health care law that is hurting our economy. Even the Federal Reserve,
in their Beige Book, said so this past month.
So I rise today to speak on the fiscal year 2014 budget and the
choice we face over whether we are going to grow the economy or just
grow government bureaucracy.
When I travel home to Wyoming, as I did last weekend and will again
this weekend, I hear from hard-working American taxpayers that they do
not believe Washington is spending their tax dollars wisely. They think
Washington has become far too inefficient, ineffective, and
unaccountable. It is not just the people in Wyoming I am hearing it
from. According to Gallup, Americans across the country estimate that
the Federal Government wastes 51 cents of every dollar it spends. More
than half of all taxpayer dollars are wasted is what the American
people believe. So when people look at the Federal budget--and the
debate that we are having today in the Senate--it is no wonder they are
concerned. They want to know how this budget is going to affect them
and their quality of life.
Looking at the Democratic budget, I think the American people have
every reason to be skeptical and every reason to be concerned. This
budget is just more of the same--more taxes, more spending, and more
debt--and it never reaches balance, not this year, not 10 years from
now, not ever.
This budget does far too little to heal our ailing economy and far
too much to expand Washington bureaucracy. The budget the Democrats
have put forward would increase taxes by $1 trillion. That is on top of
the trillion dollars in tax increases in the President's health care
law. It is also on top of the tax hikes the President demanded in the
January deal to avoid the fiscal cliff. In contrast, the Republican
plan from the House Budget Committee will not increase taxes at all.
The Democrats' budget will also rack up $7.3 trillion in new debt
over the next decade. Since President Obama took office 4 years ago, he
has added more than $6 trillion to our national debt. For 4 years, he
has run budget deficits of over $1 trillion each and every one of those
4 years. Now Senate Democrats want to throw good money after bad and
add another $7 trillion on top of that. The President has simply wasted
too much of the American taxpayers' money. The American people have
been stuck with an enormous bill as well as an anemic economy and
economic growth that has been very slow.
The American people think more than half of all Washington spending
is wasted, and the Democrats cannot find a single dollar that they
think should be saved. Democrats actually want to increase Washington's
spending by another $645 billion.
This budget would spend $46.4 trillion over the next 10 years.
Apparently, President Obama thinks the only things which need to be cut
from our budget are White House tours.
Well, Republicans and the American people know there is a lot more we
could be cutting. Taxpayers are demanding Washington finally get
serious about our budget and stop the political games and political
gimmicks. It is time for Washington to do what families across the
country have always needed to do, live within their means. Democrats
still don't seem to get it. They continue to insist the rules don't
apply to Washington, and they should not be held accountable for their
spending choices.
Like their other failed policies of the past few years, the
Democrats' plan is very much a statement of their priorities. It does
nothing to stop the overregulation which is destroying jobs and
strangling our economy. It protects failing government programs from
reform. It does nothing to preserve and protect Medicare and Social
Security for future generations. It spends more money so Washington
Democrats don't need to make a single tough choice. They have made
their priorities clear, but they are the wrong priorities for America.
Republicans have offered a plan which starts to rein in Washington's
spending and getting it back in line with revenue. This is what we
should be doing. With a debt of more than $16 trillion, it is why, and
it is way beyond the time to balance the budget.
We need to finally start to ease the burden of that debt on future
generations. We need to reduce our obligations to countries such as
China. We need budget reforms which help to grow our economy and create
jobs, or we can go in the opposite direction the Democratic way. The
Democratic budget never balances. It never even comes close to
balanced.
The smallest deficit it ever achieves would be more than $400 billion
in 2016, and then the deficit begins to climb again. It continues
Washington's unrestrained borrowing and spending and continues the
damage 4 years of failed Democratic priorities have done to our
economy. According to one independent analysis, the Democrats' budget
would cost America 853,000 jobs. Total economic output would be $1.4
trillion less because of this budget. Private investment would be $82
billion less per year.
As bad as this budget is, at least we finally have a Democratic
budget to debate. This is the first time in 4 years the Democrats have
even bothered to offer a budget in the Senate.
President Obama has not even submitted a budget. Where is the
President's budget? It was due on February 4. Now the White House says
they will
[[Page S2121]]
finally produce a budget maybe sometime in April. This is more than 2
months late.
What we have to work with is an unserious budget plan written by
Senate Democrats. It is inadequate to the challenges we face as a
country. It is out of touch with what the American people want, and it
is a slap in the face to the hard-working taxpayers who will need to
pay for it.
If President Obama truly believes we can take a balanced approach to
our budget, he should publicly oppose this wildly unbalanced budget
which harms America. We need a serious budget, one which grows the
economy, not government bureaucracy.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Tennessee is recognized.
Mr. ALEXANDER. Mr. President, I wish to speak for a few minutes about
11 million low-income children in America, children which all of us
would like to help. These are children that I wish would have a chance
to get a little help getting to the starting line towards realizing the
American dream. I am talking about the children we help through the
Federal education program called title I of the elementary and
secondary education act.
It is the largest of our Federal programs aiding elementary and
secondary schools. It provides $14.5 billion a year to local school
districts. The express purpose of it is to help low-income children in
schools across our country.
The problem is that the money is not going to help those children as
it was intended. It is being diverted for other purposes.
As part of our discussion today and tomorrow on the budget, I will be
offering an amendment on behalf of myself, Senator Paul, Senator Rubio,
Senator Toomey, and Senator McConnell, which will redirect the 14.5
billion Federal dollars we spend on behalf of 11 million children
living in poverty.
This is the way we would do it: We would simply pin $1,300 in funds
to each of those children, and let this money follow the child to the
school they attend, any accredited school, public or private.
In a contentious Washington world this is a problem which seems to
have a broad amount of agreement from the left and the right. As I
said, this $14.5 billion, which is appropriated expressly to help these
11 million children, isn't getting to them. It is ending up in other
places. It is distributed by a complicated Federal formula which is
generally based on the percentage or number of low-income children in a
particular school district and the average per-pupil expenditure in the
State.
What happens is the money largely follows the teachers' salaries. The
children in wealthier districts are usually taught by teachers who earn
higher salaries. The children in poor districts are usually taught by
the teachers who earn lower salaries. A lot of the title I money ends
up in the schools with more of the wealthier children instead of the
schools with the poorer children.
Marguerite Roza, in a report by the Center for American Progress--
which I think can be fairly described as a progressive think tank,
explained:
The difference in actual school expenditures are often substantial
because teachers' salaries are based on their experience and credits or
degrees earned, and because high-poverty schools have many more less
experienced, lower paid teachers and much more turnover than low-
poverty schools.
She offers Baltimore as an example:
When teachers at one school in a high-poverty neighborhood
were paid an average of $37,618, at another school in the
same district the average teacher's salary was $57,000.
Assuming the same average number of teachers per school, say 20, the
difference in dollars for the two schools is $387,640. That is a lot of
money per school.
Under the Federal formula, this is considered ``comparable'' or fair,
which means the poor school is essentially stuck with newer, less
expert teachers. This is a system designed for the bureaucracy and the
adults, not the students.
A different report by the Fordham Foundation, which I would call a
center-right foundation, came to a similar conclusion. It summed up its
findings by saying:
All of these problems have a common root: today, money does
not follow children to the schools they attend according to
their needs. Instead, money flows on the basis of factors
which have little to do with the needs of students, the
resources required to educate them successfully, or the
educational preferences of their parents.
We have scholars from the Center for American Progress and Fordham
Foundation coming to the same conclusion, largely because the title I
money is distributed based on teachers' salaries and because very often
the wealthier school districts pay teachers more. We have significantly
more title I money in a school with wealthier children than with poor
children, even though the purpose of the $14.5 billion is to help those
low-income children move from the back of the line to the front of the
line.
This is a lot of money. This is $1,300 per child. If you have a
school full of children who bring $1,300 with them pinned on their
jackets, they have a lot of money to help those children. I think most
of us believe that if we are trying to help children get to the
starting line, children who might not have had as much help as other
children, might not have had a book read to them by their parents,
might not have eaten lunch that day, and who have other challenges
associated with living in poverty, then we want to make sure we are
spending every single dollar designated toward them for them.
Why isn't the right solution simply to say let's take these $1,300
per student and let it follow the student to the school they attend?
This means almost all the money would go to public schools. We have
100,000 public schools in the country, but children are usually
assigned to public schools. Sometimes they may choose a public school.
This is a matter of State law. This wouldn't interfere with that at
all. If the parent chooses instead for their child to go to a nonprofit
or attend a private school, as long as that school is accredited, the
$1,300 would follow the child to that school.
Some may say that sounds a little different than the way we do it
now. It is a little different, but the main difference is the money
follows the child. It is not different that we spend public money in
private schools. We already do that with title I money by providing
services to children who go to private schools under a formula in the
Federal law. We have long experience, dating back to World War II, with
public money following college students to community colleges, to
universities, and even after World War II to high schools. The GI bill
followed the veteran to the school they wanted to go to, whether it was
the University of Tennessee, Notre Dame, Yeshiva, or any other school,
as long as it was an accredited school.
Of course, in our system of education I think we would all agree that
we have had the greatest success with higher education, for a variety
of reasons. I believe one of the reasons for this success is we have
provided generous amounts of Federal dollars that follow the student to
the accredited college of their choice, public or private. We call
those Pell grants. We call those federal loans. More than half of the
college students in the country today go there with some government
money that follows them to the academic institution of their choice.
By allowing title I money to do this, we could say the $1,300
scholarship is almost a Pell grant for kids. We could say we will
attach it right to the child. It follows the child to the school. It is
the most logical way to do that.
Some of my colleagues would like to fix this comparability problem by
imposing a whole series of mandates on State and local school districts
even though the Federal Government only supplies about 10 percent of
all the money spent on local elementary and secondary schools. This
would produce a minor revolution in the country, and it would be a
gross overextension of Federal power to say that just because we
provide 10 percent of the money, and we don't give it effectively, we
are going to make it our job to tell Tennessee, Georgia, New Mexico, or
any other State how to spend it.
The simple and logical way to solve the comparability problem that
the left and the right agree on is to let the $14.5 billion follow each
of the 11 million children living in poverty to the school they attend.
Then we could make sure that taxpayer dollars are
[[Page S2122]]
being used in the most effective way to help these children have the
single best opportunity they may have to get a leg up on reaching the
American dream, which is through a good education in the best possible
school.
I look forward to introducing an amendment to do this. As the ranking
member of the Health, Education, Labor and Pensions Committee, I look
forward to working with Senator Paul, Senator Rubio, Senator Toomey,
Senator McConnell, and, hopefully, a number of my Democratic colleagues
to solve the misallocation of title I money.
Let's do the simple and logical thing: Let the funds follow low-
income children to the school they attend.
I yield the floor.
The PRESIDING OFFICER. The Senator from Utah is recognized.
Mr. LEE. Mr. President, I rise today to raise my voice in this
important dialogue about the budget currently pending before this body.
I am thrilled as, first, we are actually having this debate. It has
been 4 long years since we passed a budget. I am deeply disappointed
the President's budget is not part of this discussion. He missed his
first Monday in February requirement, and it must not fit into his
schedule to produce one until the second week of April.
Budgets are economic documents, but they are also much more than
that. Budgets reflect moral choices we make as a nation. They shape the
kind of society we will build for the future. Budgets are about setting
priorities.
Republicans realize we have a moral obligation to spend the American
people's hard-earned dollars wisely. When those tax dollars are paid
into the government, we have an obligation to be careful with them. We
should spend them only in areas that we need to cover a
constitutionally authorized function of government and not $1 more.
That is why we support reforms to fix programs that Washington should
be funding, to eliminate programs that it shouldn't be funding and to
balance the budget in the process.
We all know the Federal Government wastes hundreds of billions of
dollars each year, and the President should work with Congress to
identify and remove wasteful areas within the budget. My office has
been focused on a very simple message that seems to make sense to every
American: Cut this, not that.
The Federal Government wastes hundreds of billions of dollars every
year, and instead of targeting waste, it is unfortunate the President
is using fear-mongering tactics to scare Americans into believing cuts
have to come first from important priorities--priorities such as first
responders, law enforcement, national security, and educators.
The President and his allies in Congress want to increase spending
and raise taxes. Republicans, meanwhile, want to prioritize spending
and keep taxes low. The President is intentionally making cuts to
government spending as painful as possible to force more tax increases.
Cut this, not that.
This is a debate about priorities. Republicans have identified
trillions of dollars in savings that would come from eliminating waste
and reforming programs rather than cutting important essential
services. The President is choosing to cut the most visible items in
order to build opposition to any further spending reductions.
The debate should not be about whether we should cut, but, instead,
how we should cut in order to preserve our ability to afford our true
national priorities.
Here are some examples of the massive waste: $1 million spent taste
testing food that would be served on Mars; $4.5 billion in improper
food stamp payments used to purchase junk food, fast food, gourmet
coffee, guns, and even alcohol; $1.5 billion for free and subsidized
cell phones billed to the American taxpayer; $230 million spent on
first-class and business-class travel.
I say to my colleagues and to the President of the United States, cut
food testing on Mars, not teachers; cut free cell phones, not border
security; cut premium first-class travel, not air traffic controllers;
cut improper food stamp payments, not first responders.
The President's second inaugural address was an advertisement for the
biggest, most expensive government our country has ever seen. It was a
pitch for new government solutions, more government programs, and the
promises of a government-made utopia. Of course, no mention was made
about the future cost of the President's vision for the country, no
mention was made about how we would pay for it, and no mention was made
of the damage that will occur from our increasing debt and deficits.
Americans and Members of this body hear this message and get pulled
into a debate over the proper size of government or whether a certain
policy represents good government or bad government. We argue for a
smaller or more limited government or for one that is more efficient or
more affordable. Unfortunately, this is often where we fail to
articulate a positive vision of what America looks like under the type
of government we are striving to create. It is time to reframe this
debate. It is time for us to focus on the kinds of principles that will
lead us to the kind of country and the kind of society we want for our
future and for ourselves.
Here is the principle I ask Americans and my colleagues in the Senate
to consider: The opposite of bad government is not necessarily good
government--at least not just good government. It isn't even
necessarily limited government. The opposite of bad government is a
strong civil society. A free and strong civil society is built on the
innate desire of Americans to contribute freely to the betterment of
the community. It is not the product of bureaucratic, centralized
decisionmakers handing down rules and regulations for the rest of us to
follow. A civil society is the result of the relationships that
connect, bind, and strengthen us. It is derived from the condition in
each of us to do our part to help those around us.
Civil society is where free individuals thrive and communities
flourish. The interconnection of local communities has always been at
the heart of our Nation. I am convinced our future success will be
found in a return to that connectedness that has driven the American
dream from the very beginning of our Nation.
We see the bonds of civil society when a parent instills values in a
child, when a doctor heals a patient, when a teacher stays late to help
a student learn to read, when a neighbor stops to help a neighbor, when
a pastor inspires faith in a troubled soul. These are the keys to
restoring our faith in the institutions of civil society and away from
dependence on an administrative state full of so-called experts. ``We,
the people'' does not mean a collective adherence to the agenda of the
ruling class in Washington. It instead means that as Americans we share
certain basic values and principles that when viewed as a whole help
form and secure a more perfect union.
Americans' belief in civil society is grounded in bedrock principles
of freedom, self-reliance, and self-governance. It is manifested in the
form of historic American institutions, including the family, schools,
churches, private groups, and civic organizations. These institutions
of civil society teach the morals, values, and behaviors that instill
faith, confidence, and trust between individuals, communities, and even
government. The Constitution of this great Nation provides the
framework that ennobles the vision of the individual while, at the same
time, enabling the value of the institutions to create an environment
where people are secure and prosperous and free.
It is important to remember that government cannot create a civil
society, but it can kill it. Over the past 80 years, the Federal
Government has expanded well beyond its constitutional limits. History
demonstrates that as the power of the Federal Government increases, the
ability to self-govern diminishes to a corresponding degree. As self-
governance decreases, so too does the influence of the institutions of
civil society. Soon, the ability to instill faith, competence, and
trust among individuals and communities is replaced by the false
promises of big government.
America is extraordinary, not because of who we are but because of
what we do. Despite the current crushing weight of our bloated Federal
bureaucracy, we can still see the strength of our Nation's fabric
through the intertwining actions of the genuine heroes all around us.
They are often described as the daily deeds that everyday citizens
perform every day, but
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they are powerful reminders of the strength of the American spirit and
the values we share.
We have a moral obligation to future generations to make the peoples'
priorities our priorities. The budget debate isn't just about dollars,
it is about sense. It is about common sense. Rather than having a
budget battle between Democratic and Republican priorities, we should
be having a dialog about American priorities.
Republicans recognize that keeping dollars, decisions, priorities
and, at the end of the day, power in the hands of the people is what
has long made America the greatest civilization the world has ever
known. Now is the time to return to that model. I encourage my
colleagues to keep that very model in mind as we embark on this
critical debate. Working together we can, we must, and we will restore
the greatness and prosperity of our Nation.
I yield the floor.
The PRESIDING OFFICER. The Senator from Georgia.
Mr. ISAKSON. Mr. President, I appreciate the recognition, and I ask
unanimous consent--I was going to ask that Senator Shaheen be allowed
to follow me. She is on the floor now and so she will.
I am pleased to stand and talk about amendment No. 138, sponsored by
Senator Shaheen of New Hampshire and myself. It is a solution to a
problem we have in this country and we have in this body. The problem
is we have not been able to appropriate; we have not been able to
budget. Our debts and deficits have grown, and it has turned into a
situation where we do not function as well as we should over the most
important responsibility of government; that is, spending money.
For one second I wish to talk about my side. Then I will defer to a
lady who has been there and done that, because the State of New
Hampshire is a biennial budgeting State.
We have a process problem. We budget every year, we spend money every
year, but we never do oversight, we never look for cost-benefit
savings, and we never look at analysis. This biennial budgeting
amendment does the following things:
No. 1, it amends the Budget Act to require the Congress to do a 2-
year budget, not a 1-year budget; No. 2, and followed by that, it
requires them to do 2-year appropriations bills, not 1-year
appropriations.
The appropriations bills and the budget are passed in the first year
of a Congress, which means the odd-number year. In the even-number
year, it is dedicated to oversight, efficiency, and cost-benefit
analysis, something we do far too little of in this body and far too
little of in this country.
Wouldn't it be nice to have elections every even-numbered year where
Members of Congress were running for office based on the savings they
are going to find, the efficiency they will create, and the
accountability they will have in appropriations, rather than talking
about how much more bacon they are going to bring home or how much more
money they will spend.
This legislation creates a new majority point of order against any
amendment that is not confined and coordinated with the 2-year budget
process and the 2-year appropriations process.
I have been in Washington 15 years, and we have gotten into the
business of when we do appropriations bills, they are omnibus; and when
we do budgets, which we haven't done in 3 years, they end up being more
of an argument over political philosophy than a practical roadmap for
the American people.
The biennial budgeting process, which has been adopted by 20 of the
50 States in this country, is a process that will work and will force
us to do what we know our job is--to appropriate, to budget, and then
to conduct oversight to make sure the money we are spending is
efficient.
One side note before I yield to Senator Shaheen. The State of Israel,
3 years ago--4 years ago--was having difficulty with deficits and debt.
They went to the World Bank for advice and consultation and they
recommended--the World Bank did--that they adopt a biennial budget
process and a biennial appropriations process. In the 3 years since
that time, while operating under those principles, they have gone from
deficits to surpluses, and they have gone from debt to a lower debt. In
other words, it has worked in Israel, it worked in a democracy, it
works in 20 of our 50 States, and it can work in the United States of
America.
Every President since Ronald Reagan has endorsed the biennial budget.
Members of the Cabinet of the President who were nominated and have
been confirmed have endorsed a biennial budget. Pete Domenici started
this process 15 years ago, and we want to bring it to a conclusion this
year. So I urge my colleagues to support and adopt amendment No. 138,
creating a biennial budget process and accountability for our
appropriations.
I yield the floor now to the Senator from New Hampshire, who has been
there and done this in her State, and she is a great partner with me in
this bipartisan amendment for success in this Congress.
The PRESIDING OFFICER. The Senator from New Hampshire.
Mrs. SHAHEEN. I wish to thank my colleague from Georgia Senator
Isakson for his eloquent and thoughtful remarks in support of the
biennial budgeting amendment. I am proud to join him as a cosponsor of
this amendment and a cosponsor of the legislation we introduced last
week, in fact.
I am pleased to point out on the floor with us is Senator Angus King,
my neighbor from Maine, who is also a sponsor of biennial budget
legislation.
I appreciate we have the budget resolution before us. I think it is
an important step toward returning to regular order. But the fact is,
as my colleague just pointed out, since 1980, we have only had two
budget processes that have finished on time, according to schedule. We
have had every President since that time, since Ronald Reagan, endorse
a biennial budget. As my colleague said, I have been there and done
that. As Governor of New Hampshire, as the Governors of 19 other
States, we have biennial budgets. It has worked very well--because as
this amendment would do, and as the biennial budget process would do,
it would give us the chance to spend the first year of the budget cycle
working on the budget, looking at programs and preparing for the budget
and then the second year in oversight, so we can make sure what we are
spending our money on is effective and is doing what we want it to do.
It would give us a more transparent process and would, hopefully, allow
us to address what has been one of the real challenges we have faced in
Congress; that is, getting a budget through on time, according to the
process.
As my colleague from Georgia pointed out, as we think about
addressing the debt and deficits facing the country, as we think about
investments we need to make going forward, thinking about how we can
use the process in a way that is more effective, that works better, is
something we also ought to be including. We have had a lot of momentum
that is built around the biennial budget legislation. In the last
Congress, we had 37 bipartisan cosponsors. We had the support of then-
budget chair Kent Conrad and ranking member Jeff Sessions. So we have
some momentum. I think we clearly have an opportunity. I hope we will
take advantage of it and that our colleagues will support this effort.
I thank my colleague for his leadership.
The PRESIDING OFFICER. The Senator from Georgia.
Mr. ISAKSON. Mr. President, I just to want to thank the distinguished
Senator from New Hampshire for what she has done in supporting this,
and I thank my other colleagues who are supporting it. This is an idea
whose time has come. I urge every Member of the Senate tonight to vote
for this amendment so we can begin a new process and a new day in this
Congress.
I yield back.
The PRESIDING OFFICER (Mr. King). The Senator from Washington.
Mrs. MURRAY. Mr. President, I yield 5 minutes off the resolution to
the Senator from New Mexico.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. UDALL of New Mexico. I thank the chairman, and I rise to speak
briefly in support of the Senate budget resolution and four amendments
that I will be offering. I believe these amendments will improve the
underlying budget resolution and they deserve broad support.
First, Udall amendment No. 192 addresses the need to increase access
to care for rural veterans.
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Many of these veterans, including those in New Mexico, travel long
distances between their homes and Veterans' Administration medical
centers. Many other States have rural veterans who face the same
challenges. I am glad to be joined by Senator Moran from Kansas as a
cosponsor of this bipartisan amendment. Expanding access to health care
in rural areas helps our veterans get the care they need.
The second Udall amendment, No. 311, would ensure that the 113th
Congress can strengthen and reform the National Nuclear Security
Administration. During the past decade NNSA has shown repeated failures
in managing and planning projects. The result is costly overruns,
deferrals, and, in some cases, security lapses. These failures are not
only a threat to our national security, they pose threats to the safety
of the scientists, engineers, and other workers employed at the
National Labs.
I cosponsored an amendment to the 2013 Defense Authorization Act with
Senator Kyl to form an advisory panel and to take a look at this to
make bipartisan recommendations to improve the governance and structure
of the NNSA. It is vital that necessary reforms would be completed.
The third Udall amendment, to lay the foundation, is for future hard
rock mining reform in the 113th Congress. I have just filed this
amendment so it does not yet have a number. We should correct a
longstanding fiscal loophole and establish a royalty on hard rock
minerals mined on Federal lands. Since 1872, the Federal Government has
literally been giving away our gold, silver, uranium, and other hard
rock minerals, handing over these public resources for free. A royalty
is long overdue. It could be used for the reclamation of thousands of
abandoned hard rock mines across the country, as well as for budget
deficit reduction.
Oil and gas and coal all pay Federal royalties when extracted from
Federal land. All other developed nations apply royalties to hard rock
minerals. This amendment does not prejudge what type of royalty
Congress might agree on. The mining industry supports one type of
royalty. We have worked with Chairman Wyden, Ranking Member Murkowski,
and Majority Leader Reid on the text of this amendment, and I hope it
is acceptable to a broad range of the Senate.
Lastly, I have also filed an amendment to allow for full funding of
the Impact Aid Program. This program is one of the oldest Federal
elementary and secondary education programs, going back 63 years.
Impact Aid supports school districts that lose local revenues, such as
property taxes, when educating pupils who live on Federal lands, such
as military bases and Indian reservations. Impact Aid funding has been
flat for many years, but the costs of education have gone up
significantly, shortchanging many Indian communities.
I am pleased to be joined on this amendment by Senator Baucus of
Montana who faces many of the same issues as we do in New Mexico and
throughout the West. Finally, let me thank Chairman Murray for the work
on this budget. She has shown real courage and leadership on this
budget and pulled together a very diverse committee.
I think this is a budget bill that is good for the middle class, and
it is going to be a fair and sensible budget. The budget is critically
important to my State of New Mexico. It replaces the devastating
sequester cuts with a balanced approach that will save thousands of
jobs in my State. At home in New Mexico, sequestration is not just
another political issue, it is a bread-and-butter issue for our family
budgets: smaller paychecks, lost contracts, real economic harm.
Not only does the Senate budget resolution put a stop to the
sequester, it also helps rebuild our economy with $100 billion for jobs
and infrastructure investment. It will help spur job creation and
rebuild the outdated infrastructure on which American businesses
depend.
I urge my colleagues to support my amendments and support this
budget.
Mr. President, I yield the floor to Ranking Member Murkowski from
Alaska.
The PRESIDING OFFICER. The Senator from Alaska.
Mr. REID. Mr. President, would my friend yield for a unanimous
consent request?
Ms. MURKOWSKI. Absolutely.
Mr. REID. I do appreciate the courtesy. Members are waiting all over
the Capitol and maybe a few other places.
The PRESIDING OFFICER. The majority leader.
Mr. REID. Mr. President, I ask unanimous consent that the pending
motion be set aside and the following amendments to S. Con. Res. 8 be
called up:
Murray No. 433, Hatch No. 297, Stabenow No. 432, Grassley No. 156,
Mikulski No. 431, Ayotte No. 158, Cruz No. 202, Murray No. 439, Crapo
No. 222, and Shaheen No. 438; that the time until 8:10 p.m. be equally
divided between the two managers, or their designees, prior to votes in
relation to the Sessions motion and the first four amendments listed;
that all after the first vote this evening be 10-minute votes; that
there be 2 minutes equally divided in the usual form prior to each
vote; that no amendments be in order to the motion or any of the
amendments prior to the votes in relation to these items; that
following votes this evening, the remainder of today's session be for
debate only on the concurrent resolution; further, that when the Senate
convenes at 9 a.m. on Friday, March 22, the Senate resume consideration
of S. Con. Res. 8 with the time until 11 a.m. equally divided between
the two managers or their designees; that at 11 a.m., the Senate
proceed to vote in relation to the remaining amendments listed above;
that there be 2 minutes equally divided prior to each vote and all
after the first vote in this sequence be 10-minute votes; that upon
disposition of the last amendment listed, there be 2 hours equally
divided between the two managers or their designees remaining on the
concurrent resolution; finally, the next amendment in order be an
amendment from the majority side to be followed by a Republican
alternative to Shaheen No. 438.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. REID. Mr. President, I have been in consultation with Senator
McConnell today. We believe this is an appropriate way to go forward. I
appreciate very much the work of the two managers on this legislation.
This is noteworthy legislation. Debate at this point has been courteous
and strong. There are feelings on both sides, and that is what this
body is supposed to be.
So I am grateful to the two managers of this bill, and I again
appreciate my friend from Alaska yielding.
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. Mr. President, I ask unanimous consent to take 3 minutes
off of our side of the 30 minutes to allow the Senator from Alaska to
proceed, and then we will continue on the debate.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Alaska.
Ms. MURKOWSKI. Mr. President, I came to the floor, as Senator Isakson
from Georgia and Senator Shaheen from New Hampshire were speaking about
the biennial budget amendment and the effort they have undertaken. I
just want to acknowledge their leadership on this issue. I think it is
smart, I think it is wise, and I think it is something that we as a
Senate should surely consider. I wanted to just make that brief
comment.
As the ranking member of the Energy and Natural Resources Committee,
I know bipartisan progress on energy is possible in this Congress.
While it may take our committee some time to develop, consider, and
complete legislation within this area, we have a great opportunity to
take the first step forward today through the adoption of a number of
energy-related amendments that I have offered. I filed three amendments
that would help us seize on the historic opportunities within our
reach. I hope the Senate would agree to adjust the resolution before us
to reflect their beneficial impact.
The first amendment that I have introduced is cosponsored by the
Senator from Missouri, Mr. Blunt. It would raise an estimated $3.1
billion--not through taxes but by facilitating new energy production on
Federal lands and waters that are currently not open to development.
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It is worth noting that the $3.1 billion estimate is probably far too
low. Almost certainly that number does not account for the substantial
receipts that would result from a good plan to boost Federal production
offshore and onshore in Alaska and across the continental United
States. But for this amendment, we relied on the Congressional Budget
Office estimates for receipts that we already know we can raise. If we
were to take action today, we will also generate far greater receipts
in the years ahead. CBO doesn't assume that production will begin
within its 10-year window, but it has acknowledged that Federal
receipts will grow tremendously by several billion dollars a year once
it does.
Some Members might question why this amendment is even necessary at
all. They know that oil and natural gas production is rising in this
country. After watching a few campaign ads, listening to a few
speeches, they might think that everything is fine right now. But that
is hardly the case. While overall production has in fact risen, the
entirety of that increase has been from State and private lands.
Production on our Federal lands and waters--the only area that the
Federal Government is responsible for managing--has actually fallen.
According to the Congressional Research Service, oil production on
Federal lands is down 6 percent since 2009 while natural gas production
is down 21 percent. Just as worrisome, the pace of permitting--which is
a key indicator for future production--has also slowed.
The Senator from Missouri and I believe it is time to produce more of
our prolific resources beneath our Federal lands and waters. We need
the jobs, we need to reduce our deficits, we need to keep energy prices
down, and we need to break our dependence on foreign oil. New
production will help us accomplish all of those crucial goals, and
there is no real downside.
My second amendment is focused on increasing oil production on
Federal lands in Alaska. Right now, no production is occurring on those
lands. That is the case even though we have more than 200 million acres
of Federal land and close to 40 billion barrels of conventional oil
just waiting to be produced. The cause, of course, is the Federal
Government continues to deny, delay, and generally up-end anyone who
tries to bring energy to the market. The consequences are now apparent
for all to see.
In 1988, Alaska produced more than 2 million barrels of oil per day.
Last year, they had fallen all the way down to 526,000 barrels per day,
and it is forecasted to drop even further in the years ahead. In
Alaska, we are treating this as an emergency, and the Senate should as
well. If our production continues to decline, the Trans-Alaska Pipeline
system could be shut down. Our Nation could lose a substantial share of
its oil supply. Jobs will be lost, energy prices will rise, our
dependence on foreign oil will deepen, sapping our economy and progress
that we have made.
These consequences and others that would manifest must be avoided--
can be avoided--and it is within our power to do that. Alaska doesn't
need subsidies or loans or grants or tax credits. What we need is
permission to produce. We need the Federal Government to work with us,
not against us. We need access to our National Petroleum Reserve. We
need access to that tiny dot of land in the nonwilderness portion of
the Coastal Plains. We also need to be able to explore new areas where
resources have not yet been discovered.
My amendment is simple. It would modify the budget resolution to
account for substantial receipts--about $2.5 billion--from increased
oil in Alaska. As with the amendment that Senator Blunt and I have
cosponsored, this estimate is probably too low. We anticipate that
receipts would grow tremendously once production begins. We always talk
about the need for an ``all of the above'' policy. That would allow for
it.
I have one final amendment that I would speak to briefly, and this is
one that would facilitate the creation of an advanced energy trust
fund. This was part of my energy 2020 blueprint that I released earlier
this year. It is specifically designed to help create an energy policy
that pays for itself. It would open new lands that are not currently
available for development and devote a share of the receipts to energy
research.
This concept has gotten pretty broad support, notably from the think
tanks, and even more notably from the President himself. But I would be
remiss if I didn't point out why my plan works and why the President's
does not. While I would raise new receipts from new production, the
President would divert revenues from production that is already
scheduled to occur.
The result of his plan would be either deficit spending or, most
likely, tax hikes elsewhere in the budget. Neither of those would be
acceptable to us, particularly when we know there is a better path
forward.
My amendments offer us an opportunity to create jobs, to make energy
more affordable, to reduce our debt, to break our dependence on foreign
oil. That is in the best interests of a coherent energy policy that so
many of us are working to develop and certainly in the best interests
of our Nation's budget. I encourage my colleagues to take a look at
these amendments and, should they be brought before us for a vote, to
join me in support of them.
I yield the floor.
The PRESIDING OFFICER. Who yields time?
Mr. GRASSLEY. I think I can yield myself 10 minutes.
The PRESIDING OFFICER. The Senator from Iowa is recognized.
Mr. GRASSLEY. Mr. President, I rise to speak about amendment No. 156.
I am offering this amendment to the majority budget to ensure that tax
reform is revenue neutral and the money available to do tax reform is
not used for spending, as the underlying resolution proposes. I am
pleased to be joined in offering this amendment by a number of my
colleagues: Senator Enzi, Leader McConnell, Senator Cornyn, the finance
ranking member Senator Hatch, as well as Senators Burr, Roberts,
Portman, Isakson, Thune, Coats, and Rubio.
In order to ensure tax reform does not become a tax-raising exercise,
this amendment eliminates the nearly $1 trillion in new revenue and the
reconciliation instructions called for in the majority's budget. It
further creates a deficit-neutral reserve fund for progrowth, revenue-
neutral tax reform.
The budget reconciles the Finance Committee to come up with nearly $1
trillion in revenue. I spoke last night how difficult that is to do
unless you want to tax middle-income Americans. This reconciliation
instruction, in addition to raising a lot of money to spend more,
dashes the hopes that the Finance Committee can take a bipartisan
approach to tax reform. First, it puts in place an arbitrary deadline
that requires the Finance Committee to produce a bill by October 1 of
this year. Tax reform will be a long and difficult process. Hopefully
it will not take 3 years to produce it, as it did in 1986, the last
major tax reform we had, but discussions about tax reform should not be
cut short to meet an arbitrary deadline. The Finance Committee needs to
be allowed to do its work.
Second, reconciliation is not a suitable way to produce tax reform
that simplifies the Tax Code. This is because it prohibits any changes
to the Tax Code that score as adding anything to the deficit. This
requirement is incompatible with the goal of simplifying the Code,
making it easier to administer. Chairman Baucus has voiced similar
concerns, which is why he has concerns about including a reconciliation
instruction in the budget.
While the budget does not call explicitly for tax reform to be a part
of the reconciliation process, it has that effect by requiring the
Finance Committee to come up with nearly $1 trillion in ``savings . . .
by eliminating loopholes and cutting unfair and inefficient spending in
the Tax Code.''
If such large amounts of low-hanging fruit exist in the Tax Code, you
would have thought that either Chairman Baucus or I, during the period
of time I was finance chairman, would have gone after some of these
along with the billions of dollars of loopholes that we have worked to
close already. The truth is that the majority's definition of a
loophole is so broad as to be void of any real meaning, and their idea
of spending in the Tax Code is popular deductions widely used by
middle-class Americans such as tax deductions, mortgage interest,
charitable giving, State tax deductions, and in order to
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raise the revenue they want to, you have to go to those areas. When you
do that, you end up taxing middle-class America.
Also, referring to these tax increases as savings or as eliminating
loopholes or spending in the Tax Code does not change the fact that to
raise nearly $1 trillion, the middle class will see higher tax bills.
The budget of course does not only assume nearly a $1 trillion in tax
increases, additional reserve funds in the budget assume another $500
billion in tax hikes to pay for more spending.
The underlying premise in this budget is that the Federal taxes are
too low to support much-needed Federal spending. The budget resolution
has this completely backwards because until we get spending under
control, we will never be able to raise enough revenue that will
suffice to satisfy the spending appetite that some in Congress have.
Yesterday I had charts--I have a different one today--that lists the
last five times we had a balanced budget. The last five times were the
years 1969 and 1998 through the year 2001--5 years in the last 43
years. As you can see, in each of these years, spending as a percent of
GDP was significantly lower than 20 percent--significantly lower than
20 percent. This line represents the spending level of these years,
right here, the years when we balanced the budget. Over the next 10
years as projected by the Congressional Budget Office, under current
law spending will average 22.1 percent of gross national product as CBO
estimates it under current law. Actually the budget resolution would be
higher than that 22 percent.
Lower on the chart I have another dotted line which represents
projected revenue, right here, about 18.9 percent. That is over the
next 10 years. As this chart shows, these revenues are more than enough
to bring our budget into balance simply if we return to the spending
levels of the late 1990s and 2000.
The larger gap where spending was and where spending is projected to
be is where our problem is. In between here and here is where the
problem is. Congress has exhibited an appetite in the last few years to
go hog wild on spending compared to the average of the last 50 years of
about 20 percent.
We all know there is clutter in the Tax Code. There has been a
proliferation of tax preferences that should be reexamined. However,
they should be reexamined in the context of enacting progrowth tax
reform, not as a means to finance higher government spending. The goal
of tax reform is to simplify the Tax Code and make it more efficient.
The ultimate goal is economic growth, but true tax reform should be
revenue neutral. It should not act as a way to increase taxes. Revenue
raised by eliminating tax preferences should be used to lower marginal
tax rates because that is where you get economic growth, you encourage
entrepreneurship, and that is how you create jobs.
The assumption in the budget that business and corporate loopholes
are available for revenue reduction is particularly puzzling. We
currently have the highest tax rate among our major trading partners.
The President has even recognized the competitive disadvantage this
puts us in. That is why he has called for reducing the corporate tax
rate from 35 percent down to 28 percent. That is the President of the
United States who wants to do that.
At a recent hearing before the Budget Committee on tax expenditures,
the Democrats' only witness, Professor Edward Kleinbard, similarly
recognized the need to use revenue from eliminating business tax
preferences to lower rates. It was his view that the corporate rate
should be reduced to the mid-20s by eliminating corporate tax
expenditures.
I want to stress this was the opinion of the majority's witness.
Raising revenues by closing so-called loopholes or reducing tax
expenditures is a tax increase. Unless it is used to offset true tax
reform, it is a tax increase that will support more spending, and that
is the purpose of it, according to the budget resolution.
Tax reform, then, should be revenue neutral and my amendment would
ensure that any reduction in tax preferences is used to lower tax
rates. In other words, tax reform and not finance more spending.
I yield the floor and reserve the remainder of my time.
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. I yield 15 minutes off my time to the Senator from Iowa.
The PRESIDING OFFICER. The Senator from Iowa is recognized.
Mr. HARKIN. Mr. President, first I thank Senator Murray and the
Budget Committee for producing a budget that says loudly and clearly
that our No. 1 priority is to fight for a stronger middle class, even
as we dramatically reduce budgets and stabilize the debt by the end of
the decade. I also applaud Senator Murray and the committee for
producing a budget resolution that insists on a balanced approach to
deficit reduction: both spending cuts and revenue increases--both.
I also applaud my colleague Senator Levin for his leadership on using
his investigating subcommittee, his Permanent Committee on
Investigations, to bring to light over the last few years the number of
loopholes and the egregious tax spending that we are doing through
loopholes that allows corporations and others to get by without paying
their fair share of taxes.
Senator Carl Levin has long fought to bring fairness to the Tax Code.
His investigations have shown that one of the major things we have to
do is to close up some of those egregious loopholes.
My colleague from Iowa was just talking. He pointed out the years we
balanced the budget. I note those are the years when we had a
Democratic President, President Clinton. We were working off the 1993
deal that was made to both reduce spending and increase revenues. We
had growth in the economy. We had low unemployment. We balanced the
budget for 5 years in a row.
During that time our revenues averaged about 20 percent of our gross
domestic product. Now it is down to less than 18 percent. We also know
that demographics, including the tens of millions of baby boomers
becoming eligible for Social Security and Medicare, will place vast new
demands on our budget. At the same time, we need to make investments in
infrastructure, research, and education to prepare our young people and
our economy for the competitive global economy that is coming. I remind
my colleagues that when President George W. Bush's tax cut was passed
in 2001, it was defended on the grounds that it was only going to take
a small part of the projected surpluses that we were going to have for
the next 10 years. That was what was said.
As we now know, those surpluses didn't materialize. We had the tax
cuts, we had two unpaid-for wars that completely wiped out the expected
surpluses, and yet we kept those big tax cuts going and that created
big deficits. Then the onslaught of the great recession in 2008 pushed
our deficits even higher.
To date, only one-eighth of the revenues lost by the Bush tax cuts
have been restored. Yet many of the Republicans keep repeating their
mantra that we only have a spending problem, not a revenue problem.
This is demonstrably not the case.
If we go back in time, when I was here, President Reagan pushed
through some tax cuts. To his credit, he realized he went too far. He
reversed course and supported two income tax increases. In looking back
just 12 years ago, President George W. Bush's tax cuts also went too
far, again, contributing to the largest deficit in our history.
One would think we would want to reverse course, but Republicans have
dogmatically refused to reverse course on increasing revenues. They are
sticking to their ideological mantra. They say: Don't touch tax breaks
for the wealthy and the largest corporations. Instead, cut the programs
that undergird the middle class and meet the needs of the most
vulnerable citizens. They demand that we slash funding for
infrastructure, innovation, and education and keep tax cuts for the
wealthiest Americans.
There are abundant opportunities for cutting waste, cutting spending,
but it needs to happen on both sides. Yes, we need spending cuts. We
need to cut spending by closing tax provisions in the Tax Code that
hurt our economy. That is where we need to cut some spending--tax
spending that goes to the wealthiest and goes to large corporations.
[[Page S2127]]
I will cite a few examples. Consider the so-called deferral provision
governing taxation of profits earned by companies overseas. Follow
this: A U.S. company can deduct the cost of starting a business
overseas, such as building a facility. They can deduct the cost of
shipping equipment to that plant even if it comes from America. But the
Tax Code then allows these companies to delay paying taxes on these
profits until its profits are brought back home.
So on one hand, they get tax breaks for building a plant overseas,
they get other tax breaks for shipping the jobs overseas, they get tax
breaks for shipping equipment that could be used in America overseas--
those are immediate. They get the tax breaks right away, but when that
plant earns a profit, they are not taxed until and unless they bring
those back home. That is totally unfair to U.S. manufacturers who may
have a factory in Iowa or New Mexico and pay their full taxes at a full
and fair rate. The lost revenue is unfair to Americans who play by the
rules, pay their full taxes, and, yes, Americans who rely on essential
government services.
Here is another one. U.S. companies can sell their patents to their
own subsidiaries with an overseas postal address in a country with low
tax rates. The parent company is paid to use the patent, generating
profits for the company, but the taxes on those profits are not paid as
long as the money is technically in the subsidiary's account even if
the money is deposited in a U.S. bank.
Consider another tax outrage, and we all know it by the name of
``carried interest.'' What does that mean? It means that for those
individuals who are fortunate enough to make $10 million a year, they
pay income taxes at the rate of 39.6 percent. But if a hedge fund
manager makes $10 million managing a hedge fund and never invested a
penny, they get taxed at 20 percent, not 39.6 percent. Twenty percent
is the capital gains rate for most of our income. Well, why is that?
Well, there is no rational reason. That was just put into the Tax Code
I guess by some great tax lobbyist who was hired by the hedge fund
industry.
These gimmicks and tax breaks cost the Treasury untold billions of
dollars. They serve no constructive economic purpose. In fact, they
give incentives to corporations to make decisions that harm the U.S.
economy and American workers. By ending these abuses, we can generate
needed revenue while creating a fairer Tax Code, one that does not
reward corporations and the wealthy for behaviors that put the rest of
us at an unfair disadvantage.
When I hear someone say, well, we are going to have tax reform, but
it must be revenue neutral, what I hear is, let's keep all the tax
loopholes for the wealthy and these large corporations. I say it is
time to end that. We need that revenue for education, reinvesting in
the infrastructure of our country, biomedical research, and science
research. We need it to make sure that our young people today are able
to compete in this global economy in the future.
Compromise, commonsense, and good-faith negotiations are what we need
today. We do not need someone saying: No, we cannot raise revenues; all
we have to do is cut spending. On our side, under the leadership of
Senator Murray, we have said we will cut spending, but we will also
raise revenues. We will have a balanced approach.
I urge my colleagues to vote yes on this budget resolution and to say
no to all of these amendments that would upset what I think is a very
good, solid budget resolution that has been put forward by Senator
Murray and the committee. Let's put dogma aside. Let's act rationally
and reasonably, and let's come together for a balanced and responsible
solution to our Nation's budget challenges.
I yield the floor.
The PRESIDING OFFICER (Mr. Udall of New Mexico). The Senator from New
Hampshire.
Ms. AYOTTE. Mr. President, I rise in support of amendment No. 297,
which has been brought forward by my colleague, Senator Hatch from
Utah. I am proud to be a cosponsor of this amendment that establishes a
reserve fund to repeal the onerous medical device tax. In fact, the
medical device tax is nearly a $30 billion new excise tax on medical
devices. It took effect on January 1 to pay for the President's new
health care law, and it affects everything from orthodontics to the
most complex lifesaving medical devices--just to name a few: joint
replacements, knee braces, pacemakers, visual aids for sight-disabled
people. It affects things that help people who are ill, such as
lifesaving devices and technologies that people need, and this tax
burdens all of them, and it will increase health care costs.
I thank Senator Hatch for his tremendous leadership on this issue. He
has been fighting so hard to repeal this onerous tax since it went into
effect. I thank Senator Hatch for bringing this important amendment
forward because the medical device industry in America is a
manufacturing success, and I have seen this in my home State of New
Hampshire, where we have nearly 50 medical device companies that employ
almost 3,500 Granite Staters. We are very proud of those companies, and
we want to keep them in New Hampshire and hopefully grow them. When I
campaigned for the Senate, I went to visit many of these companies.
They told me about this tax and the impact it will have on their
companies.
The medical device technology and medical field in this country is a
great success story. In 2008 the industry employed over 420,000
workers, generated more than $24 billion in payroll, and paid 40
percent higher salaries than the national average in terms of a job.
These are great-paying jobs. They are high-quality, good-paying,
sustainable jobs, and this tax is going to make sure we have fewer of
those good jobs that Americans want so much right now. With the
Nation's unemployment rate still unacceptably high, we should be doing
everything we can to create a good climate for American companies so
they can strive and make sure we have more economic growth and make
sure people have good-quality and high-paying jobs.
If this tax is left in place, the medical device tax will absolutely
stifle hiring. For example, a 2011 study by the Hudson Institute found
that the device tax threatens nearly 43,000 jobs nationwide and will
cost $3.5 billion in wages. I hear a lot of talk from my colleagues
about investing. This is something where this tax is basically going to
kill good-paying American jobs. It defies common sense. Over 16 percent
of respondents to a survey last year said they would reduce staff and
employees in order to lower costs before the implementation of this
device tax.
In my home State of New Hampshire, a study found that we could lose
potentially hundreds of employees due to the cost of this medical
device tax.
I had an opportunity to visit one of those companies, Corflex, which
is located in Manchester. They manufacture orthopedic medical products.
Corflex has seen steady growth over the years. It is a small thriving
business in Manchester, NH. When I met with the CEO at Corflex, he
showed me their balance sheets. He showed me the balance sheets before
the medical device tax went into effect and after the medical device
tax went into effect. What he showed me is that they went from being a
profitable company to a company that would sustain a loss. This is a
great company that was founded by a person in New Hampshire who was an
entrepreneur and just had a dream. This tax would change a profitable
company into a company that would experience a loss. He said: If this
tax is not repealed, it will ultimately force companies, like us, to
cut research and development dollars, pass costs on to consumers, or
even consider reducing our workforce.
Last year I visited Smiths Medical Facility in Keene, which employs
500 people in New Hampshire. They are doing great work at Smiths
Medical. The vice president of global operations of technology told me
that repealing the medical device excise tax is about improving patient
care and investing in more innovation and jobs.
The medical device tax has sadly already cost the United States
thousands of jobs. We need bipartisan action now to repeal this onerous
tax that is killing jobs in this country. I know there are Senators on
both sides of the aisle who support the Hatch amendment.
For smaller device companies, like many in New Hampshire, this tax
hits them even harder. In fact, Teleflex--a Pennsylvania-based company
that has
[[Page S2128]]
a manufacturing plant in Jaffrey, NH--does what many larger medical
device companies do: they rely on small companies to do their research
and development. The vice president of Teleflex said:
I think the fear is that there is a lot of good that comes
out of small medical device companies, and with more costs
thrown upon them, it's going to be harder and harder for them
to sprout up and make a go of it . . . I think the view in
the industry is that this is going to stifle innovation.
Why is this going to stifle innovation? Because this is a tax that is
not a tax on profit, it is a tax on revenue. It is a 2.3-percent tax on
revenue. What does that do to startups? What does that do to
investments? Basically what we are saying is, don't start your new
medical device company here with your new idea on how to save American
lives because we are going to tax you whether you make a profit or not.
That is why this tax is very onerous on startups. It is essentially a
tax on innovation.
The device tax also stands to increase health costs, and that is why
I don't understand why it was used to fund the President's new health
care law--because we are going to see greater costs. In fact, the CMS
Actuary, Richard Foster, said he anticipates that the excise tax will
generally be passed on to health consumers in the form of higher drug
and device prices and higher insurance premiums. It will raise national
health costs by a whopping $18.2 billion by the time we reach 2018.
Even though it only went into effect a couple of months ago, we are
already hearing about the job losses in this country because of the
medical device tax. We heard that Stryker Corporation laid off 5
percent of its global workforce. Covidien, which makes surgical
instruments, recently announced the layoff of 200 American workers. And
guess where they plan to shift their production. They are shipping it
offshore to Mexico and Costa Rica. And that is the other impact of this
tax--encouraging new devices to go elsewhere, to plant their new
investment in other countries instead of here in the United States of
America. That is another horrible impact of this medical device tax.
Zimmer said it planned to cut jobs and outsource. The CEO of Cook
Medical, the world's largest privately owned medical device company,
said it will have about $20 million less to develop and improve patient
care and access to technology. We heard so many of these stories about
American companies that are being hurt tremendously by this medical
device tax.
So what is this about? This is about repealing this onerous tax. This
is a tax that taxes innovation, increases health care costs, and also
is a tax that kills good-paying American jobs.
Finally, we want the new medical devices to be developed here in this
country. We don't want them to be developed in Europe because of an
onerous tax. What we are going to see is that Americans are going to
have less access to the very new and best products because it is going
to become too costly in this country for new companies to develop those
products and for startups and, at the end of the day, it will be sad
for Americans.
I urge my colleagues to support the Hatch amendment and, again, I
thank him for his leadership.
The PRESIDING OFFICER. Who yields time?
The Senator from Alabama.
Mr. SESSIONS. Mr. President, I think we have confusion on the time
limits. I had reserved 10 minutes; I have 17 on the motion. I think
there has been some confusion about it. What is the status of the time?
I ask unanimous consent for 10 minutes.
The PRESIDING OFFICER. The time until 8:10 is divided. Of that
remaining time, the Senator from Alabama has 8 minutes. There is still
time remaining on the motion.
Mr. SESSIONS. Does that include-- The PRESIDING OFFICER. But it
cannot be used before 8:10.
Mr. SESSIONS. So that time could be used after 8:10?
The PRESIDING OFFICER. That is correct. After the votes occur.
Mr. SESSIONS. After the votes?
The PRESIDING OFFICER. There will be 2 minutes equally divided.
Mr. SESSIONS. Well, my colleague Senator Hatch is here. The 8
minutes, as I understand, that exist--he wishes to speak. If he spoke,
would that count against my time?
The PRESIDING OFFICER. It is the Senator's time to yield.
Mr. SESSIONS. I ask unanimous consent that the vote be delayed until
8:15.
The PRESIDING OFFICER. Is there objection?
Mrs. MURRAY. Mr. President, our Members have been waiting for 2\1/2\
hours to get to a vote. I know we have had a lot of time to debate. We
will have additional time after the votes as well, as the Senator
knows, tonight and tomorrow morning. I would respectfully ask if we
could stay on time because a lot of Members have been waiting for the
vote.
Mr. SESSIONS. Well, reclaiming the floor, I ask unanimous consent
that the vote start at 8:12, and I will be happy, and we will make it
all happen. Senator Hatch can have 1 minute.
Mrs. MURRAY. I assume that means the time will be divided equally,
which means the Senator from Alabama would only have 1 additional
minute.
Mr. SESSIONS. I will do my best.
I yield to Senator Hatch for 30 seconds.
Mr. HATCH. Mr. President, I rise to say a few words in support of
amendment 156 offered by Senator Grassley and myself.
This amendment would strike the tax reconciliation instructions from
the budget and, instead, create a deficit neutral reserve fund for pro-
growth, revenue-neutral tax reform.
The American people have had it with our current tax code.
It is too complex.
It is overly burdensome.
And, it is an impediment to economic growth and our global
competitiveness.
Members from both parties need to work together to reform our tax
code to provide greater fairness and simplicity and to ensure that it
encourages growth.
In order to do that, we need to work at finding ways to broaden the
tax base in order to lower the marginal tax rates.
That is how we encourage economic growth.
That is how we create jobs.
For the first time in many years, there is bipartisan agreement in
both the House and Senate on the need to move forward on tax reform.
Unfortunately, rather than letting those efforts move forward, the
budget before us today would hijack those efforts.
Under this budget, the Finance Committee would be instructed to scour
the tax code in search of nearly $1 trillion in new revenues in order
to pay for new spending.
It is bad enough that this budget would greatly increase our Nation's
debt. And, it is bad enough that it doesn't balance at any point.
But, to add massive tax increases on top of that is simply
unconscionable.
As I said this afternoon, more than 70 percent of the revenue loss
due to tax expenditures comes from the top 10 tax expenditures, most of
which predominantly benefit the middle class.
As Senator Grassley stated last night, the top 20 tax expenditures--
which also greatly benefit the middle class--account for 90 percent of
the revenue loss.
So, as we can see, we simply cannot generate a significant amount of
revenue--certainly not in the magnitude imagined under this budget--
without negatively impacting the middle class.
I hope my colleagues will reject this attempt to once again raise
taxes on the American people.
Toward that end, I hope they will support our amendment.
I will recap quickly. The Grassley-Hatch amendment assures tax reform
will travel on a bipartisan path. It corrects the partisan process in
the budget with an elimination of reconciliation. That is all it does,
and we ought to all support it.
The PRESIDING OFFICER. Who yields time?
The Senator from Washington.
Mrs. MURRAY. I yield 3 minutes to the Senator from Michigan.
The PRESIDING OFFICER. The Senator from Michigan.
Ms. STABENOW. Thank you very much, Mr. President. I thank my
colleague, the terrific chair of the Budget Committee, who has worked
so hard in putting together the budget.
I wish to speak for a moment on the amendment I will be offering in a
few
[[Page S2129]]
moments that relates to Medicare and protecting Medicare for future
generations by keeping it as an intact insurance plan. There are very
different visions, as we all know, and this will be an opportunity
tonight to vote on which vision we support.
The House, under the Ryan Republican plan, has eliminated Medicare as
we know it and replaced it with a voucher program which only covers
part of the costs, increasing costs for seniors of around $6,000 per
person. They would have to go back into the private insurance market
and try to find insurance that would work for them.
We very clearly say that Medicare is a great American success story.
We have created a generation of seniors such as my mom and future
generations who will be able to live longer, healthier lives, play with
their grandchildren and great-grandchildren because of something they
have paid into all of their lives called Medicare.
When we look at the choices, even the people who invented this whole
idea passed by the House have said that the proposals ``lack safeguards
for beneficiaries and threaten to shift costs to the elderly and
disabled and force them to shop for coverage in a confusing insurance
market.''
That is what the folks who came up with the Republican idea are
saying. Even Chairman Ryan's own description of his plan admits: ``We
are stopping the open-ended, defined benefit system.''
In other words, the Republican plan will end Medicare and end its
guaranteed benefits--benefits that seniors have paid into throughout
their lives, for the security of knowing they have a health insurance
plan; they won't have to go out and try to figure out how to find
private insurance and then have a voucher to pay for part of it.
To add insult to injury, what is most concerning is the money that is
taken away from seniors, the costs that are added, the savings in the
Republican budget, don't go to save Medicare, they go to give another
round of tax cuts for the wealthiest Americans. One more time we are
seeing seniors, as we have seen middle-class families, as we have seen
the vulnerable in our communities, find themselves sacrificing over and
over again so the wealthiest among us, the well-connected, can get
another special tax deal.
My amendment makes it very clear. If Members vote for my amendment,
they are voting for Medicare. If Members vote against it, they are
voting for the Republican plan that dismantles Medicare as we know it
and takes the money and turns it around and gives it to another tax cut
for the wealthy.
The other side of the aisle and those on the other side of the
building have called the Ryan Republican plan a balanced plan. It is
certainly not balanced for seniors. It is anything but balanced for the
middle class. I hope when the opportunity comes we will see a very
strong vote in support of my amendment to guarantee Medicare going
forward for our seniors.
Thank you very much.
The PRESIDING OFFICER. Who yields time?
The Senator from Alabama.
Mr. SESSIONS. Mr. President, it is good to be considering a budget
again. It has been 4 years since one has been brought to the floor. It
is important that we do so because the Nation has never, ever faced a
more systemic debt threat to our country.
Erskine Bowles and Alan Simpson both told us before the Budget
Committee that this Nation has never faced a more predictable financial
crisis. What they meant was that if we don't change course, we are
going to have a crisis.
I would say one of the things that would make our economy grow
better, create jobs, confidence, and productivity gains would be for
this Nation to commit itself in a responsible way over a decade of
effort to balance the budget. We can do that with increasing spending
every year by 3.4 percent. It does not even require a net reduction in
spending each year. It will be hard. It will require us to change some
course because we are on a path now to increase spending 5.4 percent a
year, and that is the difference in an unsustainable path and a
sustainable path.
We have the budget of the majority before us, Senator Murray's
budget. It is not the kind of budget we should pass. It is the kind of
budget--it requires alteration, in my view, and it needs to be placed
on a path to balance. I think my Democratic colleagues implicitly agree
with that, because they have been talking about balance all week. We
started keeping a tally on it.
Look at this chart. We made this chart not too long ago. We
determined the word ``balance'' had been mentioned by the Democrats 120
times. We kept on counting and now it is up to 165 times. Maybe that
indicates they believe a balanced budget is important. They say,
however, that when they say balance they mean we balance deficit-
reduction spending cuts with deficit-reduction tax increases, and that
totals $1.9 trillion in net deficit reduction. Nothing could be farther
from the truth. I hate to say that. It is unbelievable to me that in
the Senate we have legislation on the floor that is being counted $1
trillion--really $2 trillion off--and fundamentally, indisputably, that
is correct.
At the Budget Committee hearing last week, I asked a staffer for the
Democratic majority:
Can you honestly say that under this budget you can achieve
$1.85 trillion in deficit reduction and eliminate the
sequester with only $975 billion in new taxes?
The answer: ``No.''
When I pressed him: Well, what does that mean? He said it would be
$700 billion. And what he was talking about was $700 billion under
current law.
The way the confusion has occurred is our colleagues are switching
around in the way they compare spending cuts.
This is the true situation: Under current law--that is the Budget
Control Act and the tax increases we had in January--that is current
law--we are projecting to continue deficits throughout the entire 10-
year period and increase interest charges by dramatic amounts, placing
this country in a very serious predicament.
So what do we say about it? Mr. Elmendorf, the Director of CBO,
testified a couple of weeks ago before the Budget Committee and I asked
him: Under the current law that we are operating under, including the
full cuts in the sequester, including the tax increases in January,
were we still on an unsustainable course? He said we were.
What I want my colleagues to know with every fiber in my being is:
Please know that if you take out the sequester, you increase spending.
You do not have $1.9 trillion in deficit reduction. You have only $700
billion. And then if you add other gimmicks in the budget, including
not scoring the doc fix, misscoring war costs, and misscoring the
stimulus spending, we end up with hardly any deficit reduction at all.
We raise taxes in this budget almost $1 trillion. We have no deficit
reduction because we increase spending as much as we increase taxes.
So, apparently, my colleagues should know and think about this: A
``balanced'' plan that has been mentioned 165 times means we raise
taxes $1 trillion and we increase spending $1 trillion, and there is no
net deficit reduction in the course of this 10-year budget.
So we are asking that this budget go back to the committee and give
them full authority to produce a balanced budget in any way they wish
to. They can raise taxes, they can cut spending, but we are saying we
have to get off the unsustainable debt course. The choice is to have a
balanced budget because it will create confidence, it will create
business certainty, it will electrify the world, it will help people
see that we are on a sound path and not on a dangerous path that could
lead to fiscal crisis.
It is so important for my colleagues to know one more thing, and that
is experts have told us--Carmen Reinhart with the Reinhart-Rogoff study
has told us that when debt reaches 90 percent of the value of our GDP,
growth begins to decline in the country. We are now at 104 percent, and
the debt factor is the gross debt of the United States is what they
used in that study. This is confirmed by the International Monetary
Fund, the European Central Bank, and the Bank for International
Settlements, all of which have done studies of developed nations with
high debt, and they say it cuts growth. Reinhart and Rogoff says 1 to 2
percent. A 1-percent reduction in growth amounts to a million jobs. For
the last 3 years, our growth has substantially
[[Page S2130]]
fallen below what CBO projected. I believe the debt is already pulling
down our growth.
I ask my colleagues one more thing: All of us have traveled our
States. We have talked to our constituents. We have answered their
questions. They ask: Are you going to do anything about the budget? Are
you going to balance the budget? Why aren't you bringing up a budget?
Don't you, colleagues, say we should have a balanced budget? Don't you
say we should be moving toward a balanced budget, at least?
Many of you--at least half of our Democratic colleagues--have said
they favor a balanced budget constitutional amendment so we have this
country on a right path. You validated your promises back home. You
should support moving this bill back to conference and letting the
chairman write a budget that balances. It would make this economy much
better.
I thank the Chair and yield the floor.
Amendments Nos. 433, 297, 432, 156, 431, 158, 202, 439, 222, and 438 En
Bloc
The PRESIDING OFFICER. Under the previous order, the clerk will
report the amendments that are in order en bloc.
The assistant legislative clerk read as follows:
The Senator from Nevada [Mr. REID] proposes amendments en
bloc: for Mrs. Murray, amendment numbered 433; for Mr. Hatch,
amendment numbered 297; for Ms. Stabenow, amendment numbered
432; for Mr. Grassley, amendment numbered 156; for Ms.
Mikulski, amendment numbered 431; for Ms. Ayotte, amendment
numbered 158; for Mr. Cruz, amendment numbered 202; for Mrs.
Murray, amendment numbered 439; for Mr. Crapo, amendment
numbered 222; for Mrs. Shaheen, amendment numbered 438.
The amendments, en bloc, are as follows:
Amendment No. 433
(Purpose: To amend the resolution)
(The amendment is printed in today's Record under ``Text of
Amendments.'')
Amendment No. 297
(Purpose: To promote innovation, preserve high-paying jobs and
encourage economic growth for manufacturers of lifesaving medical
devices and cutting edge medical therapies)
At the end of title III, add the following:
SEC. ___. DEFICIT-NEUTRAL RESERVE FUND FOR REPEAL OF MEDICAL
DEVICE TAX.
The Chairman of the Senate Committee on the Budget may
revise the allocations of a committee or committees,
aggregates, and other appropriate levels in this resolution
for one or more bills, joint resolutions, amendments,
amendments between the House and the Senate, motions, or
conference reports related to innovation, high quality
manufacturing jobs, and economic growth, including the repeal
of the 2.3 percent excise tax on medical device
manufacturers, by the amounts provided in such legislation
for that purpose, provided that such legislation would not
increase the deficit over either the period of the total of
fiscal years 2013 through 2018 or the period of the total of
fiscal years 2013 through 2023.
Amendment No. 432
(Purpose: To establish a deficit-neutral reserve fund to protect
Medicare's guaranteed benefits and to prohibit replacing guaranteed
benefits with the House passed budget plan to turn Medicare into a
voucher program)
At the appropriate place, insert the following:
SEC. 3__. DEFICIT-NEUTRAL RESERVE FUND PROHIBITING MEDICARE
VOUCHERS.
The Chairman of the Committee on the Budget of the Senate
may revise the allocations of a committee or committees,
aggregates, and other appropriate levels in this resolution
for one or more bills, joint resolutions, amendments,
motions, or conference reports related to access for Medicare
beneficiaries, which may include legislation that provides
beneficiary protections from voucher payments, by the amounts
provided in such legislation for those purposes, provided
that such legislation would not increase the deficit over
either the period of the total of fiscal years 2013 through
2018 or the period of the total of fiscal years 2013 through
2023.
Amendment No. 156
(Purpose: To protect Americans from a $1,000,000,000,000 tax increase
and provide for pro-growth revenue-neutral comprehensive tax reform)
Beginning on page 49, strike line 20 and all that follows
through page 50, line 3 and insert the following:
TITLE II--RESERVE FUNDS
SEC. 201. DEFICIT-NEUTRAL RESERVE FUND FOR REVENUE-NEUTRAL
PRO-GROWTH TAX REFORM.
The Chairman of the Senate Committee on the Budget may
revise the allocations of a committee or committees,
aggregates, and other appropriate levels in this resolution
for one or more bills, joint resolutions, amendments,
amendments between houses, motions, or conference reports
that reform the Internal Revenue Code of 1986 to ensure a
revenue structure that is more efficient for individuals and
businesses, leads to a more competitive business environment
for United States enterprises, and may result in additional
rate reductions without raising new revenue, by the amounts
provided in such legislation for that purpose, provided that
such legislation would not increase the deficit over either
the period of the total of fiscal years 2014 through 2018 or
the period of the total of fiscal years 2014 through 2023.
On page 4, line 6, reduce the amount by $20,000,000,000.
On page 4, line 7, reduce the amount by $40,000,000,000.
On page 4, line 8, reduce the amount by $55,000,000,000.
On page 4, line 9, reduce the amount by $70,000,000,000.
On page 4, line 10, reduce the amount by $82,110,000,000.
On page 4, line 11, reduce the amount by $95,881,000,000.
On page 4, line 12, reduce the amount by $115,534,000,000.
On page 4, line 13, reduce the amount by $135,203,000,000.
On page 4, line 14, reduce the amount by $149,801,000,000.
On page 4, line 15, reduce the amount by $159,630,000,000.
On page 4, line 20, reduce the amount by $20,000,000,000.
On page 4, line 21, reduce the amount by $40,000,000,000.
On page 4, line 22, reduce the amount by $55,000,000,000.
On page 4, line 23, reduce the amount by $70,000,000,000.
On page 4, line 24, reduce the amount by $82,110,000,000.
On page 4, line 25, reduce the amount by $95,881,000,000.
On page 5, line 1, reduce the amount by $115,534,000,000.
On page 5, line 2, reduce the amount by $135,203,000,000.
On page 5, line 3, reduce the amount by $149,801,000,000.
On page 5, line 4, reduce the amount by $159,630,000,000.
Amendment No. 431
(Purpose: To establish a deficit-neutral reserve fund to require equal
pay policies and practices)
At the end of title III, add the following:
SEC. 3__. DEFICIT-NEUTRAL RESERVE FUND FOR EQUAL PAY FOR
EQUAL WORK.
The Chairman of the Committee on the Budget of the Senate
may revise the allocations of a committee or committees,
aggregates, and other appropriate levels in this resolution
for one or more bills, joint resolutions, amendments,
amendments between the Houses, motions, or conference reports
related to efforts to ensure equal pay policies and
practices, by the amounts provided in such legislation for
those purposes, provided that such legislation would not
increase the deficit over either the period of the total of
fiscal years 2013 through 2018 or the period of the total of
fiscal years 2013 through 2023.
Amendment No. 158
(Purpose: To prohibit the consideration of a budget resolution that
includes revenue increases while the civilian unemployment rate is
above 5.5 percent, the administration's prediction for the unemployment
rate without the stimulus)
At the end of subtitle A of title IV, add the following:
SEC. 4__. POINT OF ORDER AGAINST CONSIDERATION OF A BUDGET
RESOLUTION THAT INCLUDES REVENUE INCREASES
WHILE THE UNEMPLOYMENT RATE IS ABOVE 5.5
PERCENT.
(a) Point of Order.--It shall not be in order in the Senate
to consider a concurrent resolution on the budget for the
budget year or any amendment, amendment between Houses,
motion, or conference report thereon that includes a revenue
increase while the unemployment rate is above 5.5 percent.
(b) Supermajority Waiver and Appeal in the Senate.--
(1) Waiver.--Subsection (a) may be waived or suspended in
the Senate only by an affirmative vote of three-fifths of the
Members, duly chosen and sworn.
(2) Appeal.--An affirmative vote of three-fifths of the
Members of the Senate, duly chosen and sworn, shall be
required to sustain an appeal of the ruling of the Chair on a
point of order raised under subsection (a).
(c) Determination of Revenue Increase.--For purposes of
this section, a revenue increase is an increase in Federal
Revenues in any fiscal year above total revenues in the same
fiscal year of the most recent Congressional Budget Office
baseline.
(d) Determination of Unemployment Rate.--For purposes of
this section, the unemployment rate is the Current Population
Survey seasonally adjusted national unemployment rate for the
most recent month, published by the Bureau of Labor
Statistics.
Amendment No. 202
(Purpose: To establish a deficit-neutral reserve fund to provide for
the repeal of the Patient Protection and Affordable Care Act and the
Health Care and Education Reconciliation Act of 2010 and to encourage
patient-centered reforms to improve health outcomes and reduce health
care costs, promoting economic growth)
At the appropriate place, insert the following:
[[Page S2131]]
SEC. ___. DEFICIT-NEUTRAL RESERVE FUND TO REPEAL THE PATIENT
PROTECTION AND AFFORDABLE CARE ACT AND THE
HEALTH CARE AND EDUCATION RECONCILIATION ACT OF
2010.
The Chairman of the Committee on the Budget of the Senate
may revise the allocations of a committee or committees,
aggregates, and other appropriate levels in this resolution
for one or more bills, joint resolutions, amendments,
amendments between houses, motions, or conference reports
relating to the repeal of the Patient Protection and
Affordable Care Act and the Health Care and Education
Reconciliation Act of 2010 without raising new revenue, by
the amounts provided in such legislation for those purposes,
provided that such legislation would not increase the deficit
over either the period of the total of fiscal years 2013
through 2018 or the period of the total of fiscal years 2013
through 2023.
Amendment No. 439
(Purpose: To amend the deficit-neutral reserve fund for tax relief to
provide tax relief for low and middle income families)
On page 56, line 12, insert ``relief for low and middle
income families'' after ``enterprises,''.
AMENDMENT NO. 222
(Purpose: To establish a deficit neutral reserve fund to repeal the tax
increases enacted under the Patient Protection and Affordable Care Act
that were imposed on low- and middle-income Americans)
At the appropriate place insert the following:
SEC. ___. DEFICIT-NEUTRAL RESERVE FUND TO REPEAL TAX
INCREASES UNDER THE PATIENT PROTECTION AND
AFFORDABLE CARE ACT IMPOSED ON LOW-AND MIDDLE-
INCOME FAMILIES.
The Chairman of the Senate Committee on the Budget may
revise the allocations of a committee or committees,
aggregates, and other appropriate levels in this resolution
for one or more bills, joint resolutions, amendments,
amendments between houses, motions, or conference reports
that would repeal the tax increases enacted under the Patient
Protection and Affordable Care Act that were imposed on low-
and middle-income Americans by the amounts provided in such
legislation for that purpose, provided that such legislation
would not increase the deficit over either the period of the
total of fiscal years 2013 through 2018 or the period of the
total of fiscal years 2013 through 2023.
Amendment No. 438
(Purpose: To establish a deficit-neutral reserve fund to protect
women's access to health care, including primary and preventative
health care, family planning and birth control, and employer-provided
contraceptive coverage, such as was provided under the Affordable Care
Act (PL 111-148))
At the appropriate place, insert the following:
SEC. ___. DEFICIT-NEUTRAL RESERVE FUND RELATING TO WOMEN'S
HEALTH CARE.
The Chairman of the Committee on the Budget of the Senate
may revise the allocations of a committee or committees,
aggregates, and other appropriate levels in this resolution
for one or more bills, joint resolutions, amendments,
motions, or conference reports related to women's access to
health care, which may include the protection of basic
primary and preventative health care, family planning and
birth control, or employer-provided contraceptive coverage
for women's health care, by the amounts provided in such
legislation for these purposes, provided that such
legislation does not increase the deficit or revenues over
either the period of the total of fiscal years 2013 through
2018 or the period of the total of fiscal years 2013 through
2023.
The PRESIDING OFFICER. The Senator from Washington.
Amendment No. 433
Mrs. MURRAY. Mr. President, I want all of our Members to understand
that the second amendment we will be voting on tonight is the Ryan
budget.
Now, there seems to be some resistance among my Republican colleagues
in bringing up the House Republican budget for a vote, and it is pretty
easy to see why that is. Last year's Republican budget was, in fact,
soundly rejected by the American people in the election. Since then, it
continues to be very clear the American people prefer a balanced and
fair approach that puts our economy and our middle class first--not an
extreme, irresponsible approach.
Unfortunately, House Republicans put forward a budget last week that
doubles down on the rejected ideology that the American people spoke
about. They have a new talking point about their same old budget. They
now claim their budget would eliminate the deficit in 2023. House
Budget Committee Chairman Paul Ryan has even said it does not really
matter how their budget eliminates the deficit.
Americans across our country who will feel the impact of the choices
we make in the coming weeks and months believe that it does matter. So
while some of my Republican colleagues would probably prefer not to
hear about it, I think that the impact of the House Republican budget
is a crucial part of this debate, and we owe it to the American people
to put our opinions on the record.
We have come a long way, but there are still far too many Americans
today who are unemployed or underemployed, which is why our Senate
budget's first priority is boosting our economic recovery.
Speaker Boehner has actually agreed with President Obama that our
debt does not present ``an immediate crisis.'' So you might think the
House budget would phase in cuts responsibly so we can protect our
fragile recovery.
Instead, the House Republican budget would do serious damage to job
creation and job growth, and it doubles down on the harmful cuts from
sequestration, which the nonpartisan Congressional Budget Office
estimates will lower employment by 750,000 jobs this year alone and
slow economic growth.
The House Republican budget will weaken our economy in the long term
as well. As any business owner will tell you, in tight times, the last
thing you want to do is cut investments that help make you stronger.
Well, that is what the House Republican budget does. It cuts
investments in education, so our students and workers are less prepared
for the jobs of the future. It would undermine our ability to upgrade
our roads and bridges and highways and ports even though our national
infrastructure just got a D-plus from the American Society of Civil
Engineers. And the House budget would greatly reduce our ability to
support research and development, making it so much harder for us to
maintain the innovative edge that helps us attract new industries and
new businesses to the United States.
Americans want to see a budget that puts the middle class first and
asks the wealthiest Americans and biggest corporations to do their fair
share too as we work toward deficit reduction.
So our Senate budget locks in tax cuts for the middle class while
closing loopholes and cutting wasteful spending in the Tax Code. Our
budget uses that new revenue from the wealthiest Americans and biggest
corporations for deficit reduction and for investments that support our
economy and strengthen our middle class.
The House Republican budget, which we will vote on tonight, does the
opposite. According to the Tax Policy Center, the tax plan in the House
Republican budget would cost nearly $5.7 trillion in lost Federal
revenue, and the majority of that lost revenue would benefit the
wealthiest Americans.
Just like past House Republican budgets, it is once again pretty
unclear how this budget would pay for all those tax cuts that are
skewed toward the wealthiest. But the reality is that to achieve the
goals that are laid out in their budget, House Republicans will either
have to add to the deficit--meaning their budget might not actually
balance, as they claim--or they are going to have to raise taxes on the
middle class.
According to the Center on Budget and Policy Priorities, to keep from
increasing the deficit while lowering rates--which they propose to do--
the House budget would have to raise taxes by an average of $3,000 on
families making less than $200,000 a year who have children. But in
their plan, the wealthiest Americans will see a net tax cut averaging
about $245,000.
There is no reason middle-class families should have to pay for a tax
cut for the wealthiest Americans. That is bad for our economy. It is
very unfair. That kind of unbalanced approach is what made Americans
reject the House Republican budget in the first place.
The same is true of Medicare. We just heard Senator Stabenow talk
eloquently about the importance of Medicare. Well, the House Republican
budget would replace the Medicare guarantee with a voucher, capped at
growth levels below projected health care costs, forcing our seniors to
pay more and more out of pocket, and ending Medicare as we know it.
That is not a solution that our seniors deserve.
AARP said, in their critique of the House Republican budget:
Removing the Medicare guarantee of affordable health
coverage seniors have contributed to through a lifetime of
hard work is not the answer.
[[Page S2132]]
That is not me, that is AARP.
The Senate budget offers a much better answer. Let me remind
everyone, in our budget we uphold the principle--consistent with
Simpson-Bowles and all other bipartisan deficit reduction proposals--
that the most vulnerable families should not be asked to bear the
burden of deficit reduction.
Our budget maintains the safety net that has kept millions of
families and children above the poverty line during the recession and
strongly supports efforts to help our low-income students and others,
as they try to get back in the job market.
House Republicans say their budget balances. Nothing in it sounds
like balance to me. I would like to remind my colleagues as this debate
continues that unlike what House Republicans have said about how a
budget achieves its goals, how it achieves those goals really matters a
lot.
The American people have rejected this plan, and, understandably,
some of my colleagues across the aisle would prefer not to vote on it.
Our Senate budget offers a credible, serious approach to a fair and
bipartisan agreement. It puts jobs and the economy first and provides a
credible, balanced path forward.
We are going to have to make some tough choices in the coming weeks
and months, and I recognize moving away from the extreme approach in
the House Republican budget is going to be a tough choice for many of
my Republican colleagues. But I hope, as they consider the effects of
the House Republican budget on our economy and on our families
throughout the country, and the fact that the House Republican approach
has been thoroughly reviewed and rejected by the American people, they
will now be willing to come to the table, end the gridlock and
dysfunction, and discuss a fair, comprehensive budget deal.
Mr. President, I yield the floor and yield the remainder of my time.
The PRESIDING OFFICER. The Senator from Alabama.
Motion To Recommit
Mr. SESSIONS. Mr. President, I ask for the yeas and nays on the
motion to recommit.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The question is on agreeing to the motion.
The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from New Jersey (Mr.
Lautenberg) is necessarily absent.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 46, nays 53, as follows:
[Rollcall Vote No. 45 Leg.]
YEAS--46
Alexander
Ayotte
Barrasso
Blunt
Boozman
Burr
Chambliss
Coats
Coburn
Cochran
Collins
Corker
Cornyn
Crapo
Cruz
Enzi
Fischer
Flake
Graham
Grassley
Hatch
Heller
Hoeven
Inhofe
Isakson
Johanns
Johnson (WI)
Kirk
Lee
Manchin
McCain
McConnell
Moran
Murkowski
Paul
Portman
Risch
Roberts
Rubio
Scott
Sessions
Shelby
Thune
Toomey
Vitter
Wicker
NAYS--53
Baldwin
Baucus
Begich
Bennet
Blumenthal
Boxer
Brown
Cantwell
Cardin
Carper
Casey
Coons
Cowan
Donnelly
Durbin
Feinstein
Franken
Gillibrand
Hagan
Harkin
Heinrich
Heitkamp
Hirono
Johnson (SD)
Kaine
King
Klobuchar
Landrieu
Leahy
Levin
McCaskill
Menendez
Merkley
Mikulski
Murphy
Murray
Nelson
Pryor
Reed
Reid
Rockefeller
Sanders
Schatz
Schumer
Shaheen
Stabenow
Tester
Udall (CO)
Udall (NM)
Warner
Warren
Whitehouse
Wyden
NOT VOTING--1
Lautenberg
The motion was rejected.
Mr. REID. Mr. President, I move to reconsider the vote and to lay the
motion on the table.
The motion to lay on the table was agreed to.
Mr. REID. Mr. President, while I have everyone's attention, today,
this evening, and tomorrow, we are going to have a lot of votes.
Everyone should understand they are not going to have time to spend a
lot of time with constituents, to make phone calls. When the time is
up, we are turning it in--Democrats or Republicans. There are no
excuses. We have a lot to do and we are determined to get these votes
in very quickly.
Amendment No. 433
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. Mr. President, this next amendment is the Ryan budget.
The House Republicans have doubled down on failed policies by passing
the same budget that was rejected by the American people just a few
months ago. Now Senate Republicans are going to have to decide whether
they agree with this approach.
This budget would be devastating for the middle class and the
economy. It would cause millions of our workers to lose their jobs and
dismantle programs such as Medicare that seniors and families depend
on. It relies on gimmicks and tricks to eliminate the deficit by an
arbitrary date and does all that while giving the wealthiest Americans
a tax cut.
I encourage my colleagues to oppose this amendment.
The PRESIDING OFFICER. Who yields time?
The Senator from South Dakota.
Mr. THUNE. Mr. President, the House Republican budget does something
the Democratic budget does not do--it balances. It actually balances in
10 years, and it does it not by taxing more but by spending less,
spending at a slower rate--3.4 percent over that 10-year period.
If we look at what the House Republican budget does, it is focused on
growing the economy, not growing the government. What the Democratic
budget, before the Senate this evening, does is it grows the
government, not the economy.
In fact, if we look at the analysis that has been done, it is
suspected the Democratic budget would cost us 850,000 jobs and reduce
take-home pay for middle-class families by $1,500. The House Republican
budget takes seriously the challenges that are facing this country,
takes the steps necessary to save and protect Medicare for future
generations of Americans, something this budget--the Senate Democratic
budget--does not do.
I urge my colleagues to support this budget, and it is a serious one,
that balances the budget in 10 years and puts our economy back in
growing mode and our fiscal house back in order.
Mrs. MURRAY. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The question is on agreeing to the amendment.
The clerk will call the roll.
The bill clerk called the roll.
Mr. DURBIN. I announce that the Senator from New Jersey (Mr.
Lautenberg) is necessarily absent.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 40, nays 59, as follows:
[Rollcall Vote No. 46 Leg.]
YEAS--40
Alexander
Ayotte
Barrasso
Blunt
Boozman
Burr
Chambliss
Coats
Coburn
Cochran
Corker
Cornyn
Crapo
Enzi
Fischer
Flake
Graham
Grassley
Hatch
Hoeven
Inhofe
Isakson
Johanns
Johnson (WI)
Kirk
McCain
McConnell
Moran
Murkowski
Portman
Risch
Roberts
Rubio
Scott
Sessions
Shelby
Thune
Toomey
Vitter
Wicker
NAYS--59
Baldwin
Baucus
Begich
Bennet
Blumenthal
Boxer
Brown
Cantwell
Cardin
Carper
Casey
Collins
Coons
Cowan
Cruz
Donnelly
Durbin
Feinstein
Franken
Gillibrand
Hagan
Harkin
Heinrich
Heitkamp
Heller
Hirono
Johnson (SD)
Kaine
King
Klobuchar
Landrieu
Leahy
Lee
Levin
Manchin
McCaskill
Menendez
Merkley
Mikulski
Murphy
Murray
Nelson
[[Page S2133]]
Paul
Pryor
Reed
Reid
Rockefeller
Sanders
Schatz
Schumer
Shaheen
Stabenow
Tester
Udall (CO)
Udall (NM)
Warner
Warren
Whitehouse
Wyden
NOT VOTING--1
Lautenberg
The amendment (No. 433) was rejected.
Mrs. MURRAY. Mr. President, I move to reconsider the vote.
Mrs. BOXER. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Amendment No. 297
The PRESIDING OFFICER. Under the previous order, there will now be 2
minutes of debate equally divided in the usual form prior to a vote in
relation to amendment No. 297, offered by Mr. Hatch.
The Senator from Utah.
Mr. HATCH. Mr. President, what we want to do is repeal the $30
billion costly medical device tax. It is a gross tax on these
businesses. We have already lost 5,000 jobs and we will lose 46,000
more.
I hope everybody will vote for this.
Ms. KLOBUCHAR. Mr. President, this is a bipartisan amendment. This is
about innovation and jobs. The medical device industry is one of our
biggest exporters. We have so many opportunities out there with a
growing middle class in China and India to export even more, but we
cannot have a tax that puts us at a competitive advantage. I think
people understand that. This is about manufacturing, high-skilled jobs,
millions of jobs in America.
I ask my colleagues to vote with Senator Hatch and me to repeal this
tax.
The PRESIDING OFFICER. Who yields time?
The Senator from Utah.
Mr. HATCH. Mr. President, I yield back the remainder of my time and
ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The question is on agreeing to the amendment.
The Senator from Washington.
Mrs. MURRAY. Mr. President, I yield back all time and ask for the
yeas and nays.
The PRESIDING OFFICER. The yeas and nays are ordered.
The clerk will call the roll.
The legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from New Jersey (Mr.
Lautenberg) is necessarily absent.
The PRESIDING OFFICER (Ms. Baldwin). Are there any other Senators in
the Chamber desiring to vote?
The result was announced--yeas 79, nays 20, as follows:
[Rollcall Vote No. 47 Leg.]
YEAS--79
Alexander
Ayotte
Baldwin
Barrasso
Begich
Bennet
Blumenthal
Blunt
Boozman
Burr
Cantwell
Cardin
Casey
Chambliss
Coats
Coburn
Cochran
Collins
Corker
Cornyn
Cowan
Crapo
Cruz
Donnelly
Durbin
Enzi
Fischer
Flake
Franken
Gillibrand
Graham
Grassley
Hagan
Hatch
Heitkamp
Heller
Hoeven
Inhofe
Isakson
Johanns
Johnson (WI)
Kaine
King
Kirk
Klobuchar
Lee
Manchin
McCain
McConnell
Menendez
Merkley
Mikulski
Moran
Murkowski
Murphy
Murray
Nelson
Paul
Portman
Pryor
Reed
Risch
Roberts
Rubio
Schumer
Scott
Sessions
Shaheen
Shelby
Stabenow
Thune
Toomey
Udall (CO)
Vitter
Warner
Warren
Whitehouse
Wicker
Wyden
NAYS--20
Baucus
Boxer
Brown
Carper
Coons
Feinstein
Harkin
Heinrich
Hirono
Johnson (SD)
Landrieu
Leahy
Levin
McCaskill
Reid
Rockefeller
Sanders
Schatz
Tester
Udall (NM)
NOT VOTING--1
Lautenberg
The amendment No. 297 was agreed to.
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. Madam President, I move to reconsider the vote, and I
move to lay that motion on the table.
The motion to lay on the table was agreed to.
Amendment No. 432
The PRESIDING OFFICER. Under the previous order, there will now be 2
minutes of debate equally divided in the usual form prior to a vote in
relation to amendment No. 432, offered by Ms. Stabenow.
The Senator from Washington.
Mrs. MURRAY. I yield my 1 minute to the Senator from Michigan.
Ms. STABENOW. Madam President, this is a very simple, straightforward
amendment. A ``yes'' vote supports Medicare as an ongoing insurance
plan. A ``no'' vote sides with what the House of Representatives has
done with the Ryan Republican budget: dismantling Medicare, turning it
into a voucher program, adding $6,000 on average in costs to seniors
and, adding insult to injury, their budget takes the money, doesn't
strengthen Medicare but provides another tax cut for the wealthiest
Americans, averaging about $245,000 for those at the very top. Please
vote yes. Let seniors know in this country what they have paid into
their entire lives will be there for them and the great American
success story of Medicare will remain strong for the future.
The PRESIDING OFFICER. The Senator from Utah.
Mr. HATCH. Madam President, I rise to set the record straight.
Amendment No. 432, which characterizes the House budget plan as a plan
to turn Medicare into a voucher program, is patently false. This
amendment is not trying to voucherize Medicare. That is not true. I
think it is ironic that my colleagues on the other side of the aisle
attack the House budget proposal when the Affordable Care Act took $716
billion from the bankrupt Medicare Program to create an unsustainable
new entitlement.
In no way can the House budget be considered as turning Medicare into
a voucher program, and we reject the characterization of amendment No.
432. The House budget proposal draws from bipartisan proposals put
forth by the Breaux-Thomas Medicare Commission, President Bill Clinton,
and Domenici-Rivlin.
We are prepared to take the amendment. We will be happy to take it by
unanimous consent.
The PRESIDING OFFICER. The time of the Senator has expired.
Mrs. MURRAY. I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second? There appears to
be a sufficient second.
The question is on agreeing to the amendment.
The clerk will call the roll.
The assistant bill clerk called the roll.
Mr. DURBIN. I announce that the Senator from New Jersey (Mr.
Lautenberg) is necessarily absent.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 96, nays 3, as follows:
[Rollcall Vote No. 48 Leg.]
YEAS--96
Alexander
Ayotte
Baldwin
Barrasso
Baucus
Begich
Bennet
Blumenthal
Blunt
Boozman
Boxer
Brown
Burr
Cantwell
Cardin
Carper
Casey
Chambliss
Coats
Coburn
Cochran
Collins
Coons
Corker
Cornyn
Cowan
Crapo
Donnelly
Durbin
Enzi
Feinstein
Fischer
Flake
Franken
Gillibrand
Graham
Grassley
Hagan
Harkin
Hatch
Heinrich
Heitkamp
Heller
Hirono
Hoeven
Inhofe
Isakson
Johanns
Johnson (SD)
Johnson (WI)
Kaine
King
Kirk
Klobuchar
Landrieu
Leahy
Levin
Manchin
McCain
McCaskill
McConnell
Menendez
Merkley
Mikulski
Moran
Murkowski
Murphy
Murray
Nelson
Portman
Pryor
Reed
Reid
Risch
Roberts
Rockefeller
Rubio
Sanders
Schatz
Schumer
Scott
Sessions
Shaheen
Shelby
Stabenow
Tester
Thune
Toomey
Udall (CO)
Udall (NM)
Vitter
Warner
Warren
Whitehouse
Wicker
Wyden
NAYS--3
Cruz
Lee
Paul
NOT VOTING--1
Lautenberg
The amendment (No. 432) was agreed to.
Mr. MERKLEY. Madam President, I move to reconsider the vote and to
lay that motion on the table.
The motion to lay on the table was agreed to.
[[Page S2134]]
Amendment No. 156
The PRESIDING OFFICER. Under the previous order, there will be 2
minutes of debate equally divided in the usual form prior to the debate
on amendment No. 156 offered by Mr. Grassley.
Who yields time?
The Senator from Iowa.
Mr. GRASSLEY. Madam President, this amendment strikes a $975 billion
tax increase. This amendment in turn sets up a deficit-neutral reserve
fund that will allow the Finance Committee to reform corporate and
individual taxes in a revenue-neutral way.
The President got his $612 billion tax increase January 1. We should
not raise taxes another $1 trillion with unemployment at 7.7 percent.
We should not close loopholes for more spending. We won't grow the
economy by raising taxes by $1 trillion as the majority wants to do. We
will grow the economy with more efficient progrowth tax reform.
My amendment is progrowth, pro-small business, and pro-jobs. The
Democrats' budget taxes the middle class to spend more. It is balanced
and fair because they have finally come to the conclusion they cannot
raise taxes just on the wealthy; they have to raise it on the middle
class.
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. Madam President, again, the goal of our budget is to
tackle our deficit and debt responsibly in a way that works for the
middle class and the economy. That means a balanced mix of responsible
spending cuts and new revenue from those who can afford it the most.
All of the bipartisan groups that have examined our budget situation
have acknowledged this reality--Simpson-Bowles, Gang of 6, Domenici-
Rivlin--and recommended more revenue than the roughly $600 billion that
we generated in the yearend deal. In fact, Simpson-Bowles and the Gang
of 6 each recommended well over $2 trillion in new revenue, which is
several times more than the yearend deal. Repealing this budget's
proposed revenue increase and striking the reconciliation instruction
would be wholly irresponsible. We cannot cut our way out of this
problem.
I urge my colleagues to vote no.
For the information of all Senators, this is the last vote this
evening. Tomorrow there are votes beginning at 11. I ask again that all
Senators be here. We are going to move through a lot of amendments
tomorrow. I have a lot of Senators asking me to have their amendment
voted on. I assure everyone that by 1 a.m., 2 a.m. tomorrow night, many
Senators won't have that opportunity unless they are here and help move
that process along.
I yield the floor and ask for a ``no'' vote.
I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
There is a sufficient second.
The question is on agreeing to the amendment.
The clerk will call the roll.
The legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from New Jersey (Mr.
Lautenberg) is necessarily absent.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 45, nays 54, as follows:
[Rollcall Vote No. 49 Leg.]
YEAS--45
Alexander
Ayotte
Barrasso
Blunt
Boozman
Burr
Chambliss
Coats
Coburn
Cochran
Collins
Corker
Cornyn
Crapo
Cruz
Enzi
Fischer
Flake
Graham
Grassley
Hatch
Heller
Hoeven
Inhofe
Isakson
Johanns
Johnson (WI)
Kirk
Lee
McCain
McConnell
Moran
Murkowski
Paul
Portman
Risch
Roberts
Rubio
Scott
Sessions
Shelby
Thune
Toomey
Vitter
Wicker
NAYS--54
Baldwin
Baucus
Begich
Bennet
Blumenthal
Boxer
Brown
Cantwell
Cardin
Carper
Casey
Coons
Cowan
Donnelly
Durbin
Feinstein
Franken
Gillibrand
Hagan
Harkin
Heinrich
Heitkamp
Hirono
Johnson (SD)
Kaine
King
Klobuchar
Landrieu
Leahy
Levin
Manchin
McCaskill
Menendez
Merkley
Mikulski
Murphy
Murray
Nelson
Pryor
Reed
Reid
Rockefeller
Sanders
Schatz
Schumer
Shaheen
Stabenow
Tester
Udall (CO)
Udall (NM)
Warner
Warren
Whitehouse
Wyden
NOT VOTING--1
Lautenberg
The amendment (No. 156) was rejected.
Mr. MERKLEY. Madam President, I move to reconsider the vote, and I
move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The Senator from Ohio.
Mr. PORTMAN. Madam President, we have had a great debate here on the
floor today about the budget. What we have heard is the fact that in
the face of unprecedented debt and deficits, we need to get spending
under control and grow the economy. Unfortunately, the Democratic
budget that has been presented doesn't do that because it actually
increases spending and increases taxes.
But there is an alternative, and that is to restrain spending in ways
that are smart but also get this economy moving so we have more revenue
and revenue the way we ought to get it, which is through growth. One
obvious way to do that is through tax reform.
We just had a vote on a tax reform proposal. I am offering a couple
of amendments that I want to talk about tonight. One is with regard to
tax reform on the business side, where there is an amazing consensus
now between Democrats and Republicans, the White House and the Capitol
on how to get this economy moving again by ensuring that our Tax Code
becomes more competitive globally--not to cut taxes, not to raise
taxes, but in a revenue-neutral way to improve the way we collect taxes
at the business level to be sure we can create more jobs at a time when
we are suffering through the worst recovery we have had since the Great
Depression.
Second, I am going to offer an amendment that ensures that we have
the right information from the Congressional Budget Office and the
Joint Committee on Taxation, which are the two groups who give us
information here on Capitol Hill, as to what tax reform means because
we want to be sure that as we reform our Tax Code, we do it in a way
that is progrowth and projobs.
Fundamental tax reform should be done across the board, in my view,
not just on the business side but also on the individual side. On the
individual side, we have a great opportunity to broaden the base of tax
and lower the rates to make the code again more progrowth. Most
businesses in America pay their taxes through the individual Tax Code
because they are what are called passthrough entities, about 85 percent
of businesses--they tend to be smaller businesses. That is very
important.
But tonight I want to talk about the other part of that, which is the
business Tax Code that relates to primarily our larger companies and a
lot of the international companies, so-called C corporations.
Back in 1986 we actually reduced the rate on the corporate side from
46 percent down to 34 percent. That was 1986. It was done in a
bipartisan way with Ronald Reagan and Tip O'Neill, and the idea at that
time was to take our tax rate down to the point that it was
competitive, meaning that it was below the average of our global
competitors.
In the intervening 2\1/2\ decades, guess what has happened. Every
single country of the developed world--the so-called OECD countries,
our global trading competitors--every single one of them has reformed
its tax code. They have lowered their rates, but they have also made
their codes more competitive--every single country except us. So
America has been on the sidelines while these other countries have
moved quickly to improve their tax code. Why? Because they want
investment, they want the jobs, and what has happened is, sure enough,
they are more competitive.
Capital is now flowing outside of this country. We are losing
headquarters. We are in a situation where if there is a foreign
acquisition to be made, those companies in foreign countries have an
advantage because they have a more competitive tax code. Our tax rate,
[[Page S2135]]
which in 1986 was purposely put in place to be just below the average
of all the developed economies in the world, is now No. 1. It is the
highest rate in the world. That is a No. 1 we don't want to have.
Japan just lowered their rate last year, putting America as the top
corporate tax rate in the world. This means, again, we are losing
people, we are losing capital, we are losing headquarters, we cannot
keep up.
So what is the solution? Well, let's go do what we did back in 1986
again, let's do it quickly, and let's do it on a bipartisan basis
because everybody seems to agree that our current code is not
competitive, that the rate is too high. We have some disagreements on
how to correct it, but actually there is a growing consensus about that
as well.
The White House has talked about this. In fact, in a February 2012
white paper issued by the Treasury Department, they said: Let's lower
the rate of corporate taxation by broadening the base, meaning reducing
or getting rid of a lot of the preferences that have built up in the
Tax Code. By the way, hundreds of them have been built up in the Tax
Code since 1986. So not only has our rate become high because other
countries have lowered theirs, we have added more and more
complications to our Tax Code.
It is not just the White House that is talking about this. In front
of our committee, the Budget Committee, a professor came to talk to
us--who was the Democrats' witness; this was not the Republican
witness--who was gung ho also on doing corporate tax reform. This was
the Democrats' witness. This is what he said:
. . . corporate income tax's statutory rate of 35 percent
is today far outside world norms. The rate needs to come
down. . . . I therefore conceive of corporate tax reform as a
roughly revenue neutral undertaking, in which the corporate
tax base will be broadened through closing business tax
expenditures and loopholes, and the resulting revenues used
to pay down the corporate rate.
Pay down the corporate rate.
In the paper from the Treasury Department in February 2012, they said
we should reinvest the savings we get from getting rid of some of these
loopholes and expenditures and use it, as they said, to invest in
lowering the rate.
So here we have an opportunity as a Congress--Republicans and
Democrats alike--to do something that is good for jobs. By the way, the
Congressional Budget Office has looked at this in terms of who
benefits. It is not the corporate boardroom that benefits, it is the
workers. They have said 70 percent of the benefit of lowering the
corporate rate is going to go to workers in the form of higher
salaries, better benefits, and more jobs.
By the way, the Congressional Budget Office has also said if you
would like to get this economy moving, probably the best bang for your
buck is going to be to do something on the corporate tax code because
it has gotten so complex and the rate has gotten so high. If you do
this, you are also doing something we ought to be doing generally in
our Tax Code; which is you are not picking winners and losers. Instead
of the government stepping in and deciding where resources are
allocated, you have the private sector doing that, market forces doing
that, which is going to help grow the economy.
So just as President Reagan and Democrats did in 1986, we should cap
or eliminate inefficient tax preferences and loopholes, and we should
use that revenue to reduce both the corporate rate and the individual
rate, without adding to the deficit.
Another amendment of mine takes this same idea, which is tax reform
on the individual-corporate side, and allows us, as legislators, to
understand better what we are doing.
Right now, when the Congressional Budget Office and the Joint
Committee on Taxation give us an analysis of taxes, they tell us the
revenue is likely to be based on what they call a static score--a
static score. It does not take into account the big macroeconomic
changes you are likely to see from people's changed behavior from lower
rates, for instance.
I will give you an example. Back in 2003, the capital gains tax, as
you know, was reduced. So what did they say? Well, the Joint Committee
on Taxation and CBO did their analysis, and they said: Well, that
means, because you lowered the rate of taxation, you are going to get
less revenue, right, because you have less taxes coming in. No. Because
they lowered the capital gains tax, there was more economic activity.
It turns out we actually got more revenue in. So in 2007 they said
revenue was going to go down. In fact, revenues shot up. The same thing
happened, by the way, back in 1997, the last time this Congress had a
unified balanced budget. That was when Bill Clinton was President, and
he worked with the Republican Congress to get some of the spending
under control, as we talked about earlier. But they also cut the
capital gains rate, and, lo and behold, as I recall, about $100 billion
showed up on the revenue side that folks did not expect because we
lowered the capital gains rate. Because of the behavioral change, the
dynamic scoring, the macroeconomic scoring, showed that was going to
happen, but the static score did not.
So as we begin to formulate what kind of tax reform we should do on
the individual side and on the corporate side, wouldn't it be great if
we had access to two kinds of analysis: one, the static score--and that
will continue to be the official analysis; nothing changes there--but
also why shouldn't we have access to the macroeconomic analysis--not
done from the outside, not from groups from the outside that might have
a pretty aggressive dynamic score, but let's just use the macroeconomic
model that the Joint Tax Committee already does. In fact, they are
required to look at it in three different ways. CBO already does. It
does not add more work in the sense that this analysis is already being
done; it is just that we are getting the benefit of it.
So this second amendment that I hope my Democratic colleagues will
also support, as I hope they will the first one, says, quite simply:
Let's have more information so we can make smarter decisions. Who could
be against that?
Some have said: Well, we do not believe in dynamic scoring. Fine. If
you do not believe in dynamic scoring, let's see what happens. We are
going to have a static score, which will be the official score still--
that is what we will have to use around here--and then we will have
that dynamic score. Again, we want that so we can formulate a better
tax proposal but also to know what the impact is going to be. We will
see what happens.
My belief is that the macroeconomic score is more likely to be
accurate, as it has been in the past, and over time I would not be
surprised if this Congress decides: My gosh, that is more consistent
with the behavior changes you are going to see with good tax reform.
Let's make that part of the official analysis. But that is not what we
are talking about tonight. The official score would still be the static
score.
I believe this will enable us to be better legislators, and certainly
it will enable us to have an opportunity, as we look at this budget
deficit and these historic debts and the impact it is having on our
kids, on our grandkids and on today's economy, to come together as
Republicans and Democrats and do the two things that everybody knows
have to be done: One, restrain spending, specifically to deal with
these important but unsustainable entitlement programs--remember this:
The Congressional Budget Office has told us in the report just about 2
weeks ago that the growth of Medicare, Medicaid, and Social Security,
incredibly important programs--and that is why we need to save them--
that growth will go up by 94 percent over the next 10 years. It nearly
doubles. In fact, they have told us that as a percent of the economy,
which is how they look at the spending--as a percent of the economy,
the only growth in our spending over the next 10 years is going to be
from these entitlement programs and interest on the debt. Other parts
of our budget actually, as a percent of the economy, are going to be
flat or even a little bit below as a percent of the GDP. But what is
going to grow dramatically are these programs.
So we know we have to have entitlement reform to save these programs
so that the trust funds do not go insolvent, which they otherwise will.
But we also know as part of that we should do tax reform. Those two
together--entitlement reform, smart reforms to make these programs work
better to ensure they are there for the future,
[[Page S2136]]
and then tax reform that is progrowth, that is going to generate
revenue, to help us because it will change people's behavior, which
will change economic growth, which will, in turn, provide more
revenue--revenue, really, the right way--will help us get the debt and
deficit under control and at the same time give people the opportunity
to get back to work, deal with the weakest economic recovery since the
Great Depression, help us to get out of the doldrums we are in right
now in this economy.
The shot in the arm that tax reform can give us--particularly if we
have the right information from these organizations on the Hill: the
Congressional Budget Office, the Joint Committee on Taxation--will
enable us to move this country forward in ways that can be bipartisan,
in ways that can be consistent with what the administration and the
Congress are talking about: restraining spending, growing the economy.
I thank the Chair for letting me talk about this tonight. I look
forward to having these amendments offered tomorrow. I hope my
colleagues on both sides of the aisle will be willing to stand together
and to say: Yes, we can do this. We can get this economy moving. We are
going to have to change the way we deal with our tax system. We are
going to have to retrain the spending. If we do that, our future can be
brighter.
I yield back my time.
The PRESIDING OFFICER. The Senator from Wyoming.
Mr. ENZI. Madam President, I just want to thank the Senator from Ohio
for his usual very clear way of explaining things. I know that comes
from the tremendous background he has had, not just in the House but
actually putting together a White House budget before. I guess the
Senator has had access to these different sources of information before
and knows how they could work if we could get access to them.
It is hard for me to believe that somebody would not want more
information. They can analyze themselves whether they think it is
useful. But more information is always better. So I thank the Senator
for bringing that amendment here, and his other amendment as well. But
as to that one, it is just incredible to me that anybody could oppose
it.
So I thank the Senator for the thought he put into it and for the
great presentation he did.
Mr. PORTMAN. I thank the Senator.
The PRESIDING OFFICER. The Senator from Kansas.
Mr. MORAN. Madam President, I have filed an amendment, No. 233, that
I would like to visit with my colleagues about this evening.
I am pleased we are debating a budget. Budgets have great purposes in
individual and business lives, and they are certainly important to us
as we try to solve the country's fiscal problems.
A budget is a document that determines how much money we have to
spend and how we are going to spend it. In determining how we are going
to spend money, we establish priorities.
I want to talk about one of my priorities for the investment of our
taxpayer dollars. Kansans and citizens from across the country pay
their taxes. In many ways, they would be pleased by having to pay taxes
if they knew the money was being well spent. One of the areas where I
strongly believe we can prioritize and that money can be well spent is
in support of the National Institutes of Health.
We have a tremendous opportunity to continue to lead in the world's
research to solve individuals' problems with their health, with the
treatment of disease, in eradicating disease, and treating the people
of our country and really the people of our world.
This amendment I am going to discuss adds $1.4 billion in spending
for the National Institutes of Health. Our citizens and our country
face a significant challenge. There is not a family in our Nation who
has not suffered from the consequences of cancer and other horrendous
diseases. We have seen tremendous success. America leads the world in
finding cures and treatments for those diseases.
A problem is, the funding for NIH has remained at a virtual
standstill since 2010. In my view, those who come to Congress with the
desire to make sure every dime, every nickel is wisely spent, and those
who come to Congress with the belief that we need to care for people
and provide compassion to all, can come together and jointly agree that
money spent on the National Institutes of Health is both. It is a sense
of providing well-being, comfort, care, and treatment for people who
desperately need that, and it is the realization that when we invest in
research, in projects that ultimately cure a disease, we are saving
money. We save money by curing and treating diseases, which then means
that the cost of health care is reduced.
Long before Congress passed a so-called health care reform bill, I
outlined to my constituents in Kansas what we could do to save health
care costs. One of the points in my plan was to invest in medical
research because money invested today in research saves lives and
reduces costs.
There is also the reality that the United States of America is the
place to do research. But we are facing tremendous challenges because
of the flat line of NIH spending and the lack of real dollars available
for medical research. In fact, we have to worry that there is a brain
drain, once again, going on in the United States. Other countries are
investing. Other countries with more difficult economic challenges than
ours are increasing their funding for medical research.
I have always worried that if we do not compete, if we do not
maintain a steady opportunity for research scientists in the United
States, we will lose the edge and the economic and health benefits that
come from having that edge in a global economy.
Our own Director of the NIH, Francis Collins--highly regarded and
with tremendous background, intellect--has indicated that we are seeing
the potential for a brain drain. This is what he said in February of
this year, just last month:
Since 2003 the NIH budget has basically lost about 20% of
its purchasing power by effectively flat budgets that have
been eroded by inflation.
The consequence of that to grantees who send us their best
ideas in hopes of being supported is that their chance of
being funded has dropped from about 1 in 3 which is where it
has been for most of the last 50 years now down to about 1 in
6 . . .
Imagine yourself as a young investigator [a scientist] with
a great idea, ready to tackle it and to do so in your
university setting somewhere [in the United States] knowing
that you have only a 1 in or less chance of getting funded,
seeing that there seems to be no real clear path forward for
achieving stability in the support of biomedical research,
wondering whether you can legitimately speak to young people
who are wanting to follow in your path about whether this is
a path they should choose.
Dr. Collins says this deeply worries her. At a time we need to
encourage our children to pursue degrees in education, science,
research and medicine and the absence of continued increase in funding
for health research, for biomedical research, we clearly send a message
this may not be the career you wish to pursue. At the same time as
other countries increase their support for biomedical research, we send
a message, even though you decide you want to pursue this career, maybe
you should pursue it someplace else. This is a serious problem which
desperately needs our attention.
I am going to ask my colleagues to support an amendment which
establishes a clear understanding of the value of biomedical research,
both again that opportunity to increase the longevity of our lives, to
improve the quality of our lives, to combat those diseases which are so
devastating to so many families in our country, knowing when we do
that, not only are we improving individual lives, the well-being of
families across our Nation, but we are also investing in an opportunity
to reduce the long-term costs of health care in the United States.
This issue is one of great importance to me, and I can't imagine
there is a Senator in our Chamber who hasn't experienced the challenges
of disease and death in their own families. We have seen tremendous
strides in turning this around. It is so clear to me we need to make
certain those strides continue.
I was pleased to have the Senator from Illinois seek me out on the
Senate floor this evening to suggest there is an opportunity for us to
work together. While I have an amendment filed, Senator Durbin and I
are having a conversation tonight, tomorrow, to see if there is a way
we can come together in a joint amendment to fully establish all of us
are in favor of funding the
[[Page S2137]]
NIH, the National Institutes of Health, at a magnitude and a level
which will again restore us to the forefront of medical research around
the globe.
We will send a message to our students and future scientists America
is the place medical research should occur and where they should pursue
their careers. Disease can be conquered and lives can be restored. Most
important, there may be hope in the United States. The serious and
debilitating diseases, the causes of death so many families face day
after day and year after year, can be cured and treated.
I look forward to those conversations with my colleagues to find the
right words to bring us together to demonstrate significant and real
support for funding the National Institutes of Health.
I yield my time.
Mr. CHAMBLISS. Mr. President, I wish to speak on what almost
qualifies as a historic event:
For the first time in 4 years, the Senate will try to complete a
budget resolution.
Since 2009--the last year the Senate passed a budget--the government
has run deficits in excess of $1 trillion every year. The Democrats'
budget resolution that we are currently debating will, in fact, only
reduce net deficits by $279 billion.
I have spoken on the Senate floor and around the country for the past
2 years in favor of a budget that will end excessive spending, provide
a platform for tax reform, and rid ourselves of oppressive debt and
deficits. But I am afraid that even after the Senate has completed its
work, I will still be advocating for those changes.
Senate Democrats have not used their proposed budget resolution to
make government better. Their proposal does little in the way of
reform, and actually grows the government instead of the economy. It is
discouraging to anyone concerned about excessive government debt, and
it is discouraging to the job seekers who are, unfortunately, so
abundant right now.
What the Democrats have proposed is not a budget at all. It is merely
a spending plan to further stunt economic growth and job creation,
while condoning increasing the deficit and growing the government. I
believe the American people expect a budget that provides a platform
for our economy to grow. A budget that increases government spending,
increases debt, and further endangers our Medicare and Social Security
is not what Georgians or people across America want.
We have a real opportunity now to correct a lot of missteps. We need
a budget that will reform our Tax Code, grow the economy, reduce
poverty, and fix our entitlements.
Yet here, in the middle of a global economic crisis, we are going to
vote on a budget that does none of that.
Mr. President, tonight the Senate voted on a budget that will balance
in 10 years the--budget proposed by House budget chairman Paul Ryan. I
can't think of better way to show the American people and the world
that our government is serious about getting back on track and
reclaiming our country's financial dominance. Simply put, Mr.
President, even with all the provisions combined, the Murray budget
doesn't get us out of debt. The Ryan Budget does.
A budget that balances in 10 years should be the starting point for
discussions, and we need to make that budget a reality now to secure
America's future. Economists, budget experts, and analysts across the
country have come to the conclusion that the debt we have already
accumulated is having a negative effect on our economy. We have known
for a long time--and have been told many times by economists--that when
a country's gross debts reach 90 percent of GDP, its economy will
contract substantially.
We have seen in places such as Japan and Europe that when debt gets
out of control, the government's response to control debts must be
tougher. Unfortunately, as my friend from Alabama, Senator Sessions,
noted yesterday, the International Monetary Fund, the Bank for
International Settlements, and the European Central Bank have all
analyzed our debt and found that we are now at 103 percent of GDP. That
is a staggering and shocking number. It is a hopeless number.
We haven't balanced our budgets in so long that we have ended up
harming America's economic engine--and the Democrats' proposal doesn't
fix anything. It merely continues our unsustainable spending.
We voted on a spending measure yesterday that lowered our
discretionary spending down to 2008 levels. With some hard work, we can
keep our discretionary spending at sustainable levels. However, what we
haven't addressed is the continued rise in mandatory spending which has
increased substantially since 2008.
We simply cannot continue to let mandatory spending go unchecked.
This budget's approach to restraint is half-hearted, at best. President
Obama likes to remind us that he is in favor of entitlement reform. I
would like to give him the benefit of the doubt about that--but is this
the best his party can come up with? We are a nation that believes in
caring for the most vulnerable among us, but if we continue to operate
our programs this way, on a path toward bankruptcy, we will never be
able to keep our promises.
We can no longer allow the American people to suffer by not providing
the economic basis for recovery and growth. The equation is simple: A
balanced Federal budget that is free of excessive debt leads to a
healthy economy and sustainable job creation.
Community Health Centers
Mr. SANDERS. I would like to thank Chairwoman Murray for including
the request I made in the budget resolution to provide $2.2 billion in
discretionary funding and $2.2 billion in mandatory funding for
community health centers in fiscal year 2014.
I believe that community health centers are the answer we are looking
for to make health care work for everyone, and I am very grateful for
the language included in this Budget that recognizes the value of
health centers.
As the Senator knows, since enactment of the Affordable Care Act,
budget cuts have significantly reduced discretionary funding for the
Community Health Center Program. Current service levels for the
Community Health Center Program have been maintained only by
redirection of the ACA's mandatory expansion funding--which is not
authorized beyond the year 2015.
In other words, beginning in fiscal year 2016, the community health
center fund will expire. Unless we find a solution to this problem,
community health center funding will be reduced by 69 percent. If
adequate funding is not restored, the result will be dramatic
reductions in the number of patients community health centers are able
to serve. I believe that would be a serious mistake.
Would the Senator be willing to work with me and other Senators on
resolving the funding cliff facing health centers in 2016 so we don't
have a massive cut facing such a valuable program?
Mrs. Murray. I thank the Senator and I couldn't agree with him more
on the value of the Community Health Center Program. I know very well
about the value they bring to Washington State, and also to the country
by controlling health care costs and delivering care to our Nation's
most vulnerable people and communities. We have included language that
recognizes the importance of adequately funding the Community Health
Center Program and I look forward to working with the Senator and other
Senators to try and find a solution to the community health center
funding cliff before it occurs.
Mr. SANDERS. I thank the Chairwoman. The sooner we can work on this
the better, as it will really give the program and all the centers
across the country the stability and certainty they need to plan for
the future.
Mrs. MURRAY. I thank the Senator for raising this very important
issue. I look forward to working with him to ensure that community
health centers can continue to provide care to our most vulnerable
populations today and in the future.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SESSIONS. There are a lot of problems with the country and the
way we manage business. Frankly, President Bush became engaged in a war
which used up so much of his time and effort. President Obama is not
trained as a manager. He has never been a manager, Governor or managed
a business. He has too little tough, serious management of the
taxpayer's money in this country. It is time for us to get
[[Page S2138]]
under control the spending which goes on.
In my humble opinion, the American people are tired of sending more
money to Washington just because we run out. We say it is not our
fault; it is the way things are. We can't have any reduction in
spending. There are people who are hurt and in pain, hungry, women,
elderly, singles, and married. They need to have more money. Any change
in our policy whatsoever means somebody is not getting something they
are entitled to.
The truth is many of our programs serve many good people in need, but
almost all those programs have serious management problems which could
be run effectively and efficiently, and the program would cost
substantially less without any significant diminishment of the
effective aid which is rendered by that program. I believe the American
people understand this absolutely and fully.
As we have done, as an amendment or idea comes forward to confront
wasteful spending, somebody in this body, particularly in the Senate,
always objects. They raise the specter of meanness and unkindness and
that sort of thing. In truth, we all ought to identify serious problems
and fix them.
For example, in our energy policy, we have had some of the most
amazing failures and losses of Federal money I can imagine, beyond
anything which is logical and absolutely should not have happened.
Most people have heard of the Solyndra company. They had political
connections to the White House and received $528 million in Federal
loans, went bankrupt and left Uncle Sam holding the bag.
There was another company, Abound Solar. It declared bankruptcy after
receiving $400 million in Federal loan guarantees. Failing to deliver
on the promises they made, somebody at the Department of Energy,
apparently, was not checking very well. Maybe they were more interested
in a press release, a big announcement, going to some solar factory and
saying how we are going to create jobs, grow the economy and pump
hundreds of millions of dollars into a program which sank.
Beacon Power received $43 million in Federal loan guarantees before
it shut down.
Fisker, an electric car maker, is not making any cars now due to
production problems. It received more than $190 million from the
Department of Energy.
A123 Systems, a battery maker, also received substantial Federal
loans. It is bankrupt.
The President emulates the failing energy programs of Europe. His
policies were designed to promote an energy theory which is not ready
economically. It is one thing to invest in research to try to create a
new battery; it is another thing to try to loan hundreds of millions of
dollars to a company to produce a product which is not competitive and
not ready for prime time. This is the mistake we made.
Mr. Lomborg, from Europe, who wrote the book ``Cool It'' and is, in
my opinion, an expert on these issues, pointed out a number of years
ago in his book the best way to handle this is for the government to
subsidize where it can and direct money to try to reach technological
breakthroughs, but you should not mandate the people of the United
States, or use any kind of program which will not work, cost a lot more
money, and have little benefit on the environment.
Back in 2008, President Obama made this statement: ``Will America
watch as the clean energy jobs and industry of the future flourish in
countries like Spain, Japan, or Germany?''
That is what he said. We need to emulate Spain, Japan, and Germany.
Spain right now is having to cut back dramatically on its forward-
leaning green mandates. They went probably further or as far as any
country in Europe. It has been a total disappointment. They are
reducing their subsidies. Their economy is in shambles, and they are
not doing well.
The Financial Times in February of this year wrote:
The Spanish government's latest bid to cut its growing
debts to the country's energy sector is expected to slash
profits at renewable energy companies as Madrid continues to
grapple with a $37 billion deficit built up through years of
subsidies.
They continue:
Shares in Acciona, Spain's largest wind power operator,
have tumbled almost 20 percent, with Analysts expecting
Acciona's earnings per share to drop by 40 percent, while
Abengoa's EPS are forecast to drop by 12 percent.
Germany is also cutting back. According to Reuters in January of this
year:
[The German energy company] RWE is delaying investments.
SIAG filed for insolvency. REpower Systems is cutting
temporary staff. All show how German Chancellor Angela
Merkel's $734 billion plan to replace nuclear reactors with
renewable sources is stalling.
Former Secretary of Treasury, under President Obama, Larry Summers
said this: ``Government is a crappy venture capitalist.''
This is exactly correct. We have no business trying to pick and throw
American taxpayers' money into risky ventures. We are not good at it.
Spain and Germany are not good at it--governments aren't.
When it is your money and you are putting up $100 million, then you
are at a point where you need to be very serious about that investment.
These are some points I wanted to make because I think the American
people are tired of hearing Washington say send more money.
No, we are not going to cut spending in Washington. We can't do that
in the budget which is on the floor. It does not cut spending, actually
does not reduce the deficit. It increases spending, increases the
deficit, and increases taxes by $1 trillion.
What did they say in the budget? We are not going to cut spending.
There is nothing we can cut. The government is working. Every dollar we
receive, every dollar we distribute is absolutely critical and cannot
be contained. Send more money. Just send more money and don't complain,
American people.
I think people are getting tired of that. They have a right to be
tired of that. They should not send another dime until we are on the
right path.
I see my friend Senator Enzi, and I would be pleased to yield the
floor.
I would note Senator Enzi is the senior member of the Budget
Committee and is a successful businessman who has a proven record in
his State. He understands these issues, and he is trained as an
accountant. I am sure when he sees what we do in the budget process
around here, he must wonder what world we are connected to.
I yield the floor.
The PRESIDING OFFICER. The Senator from Wyoming.
Mr. ENZI. I wish to thank the Senator from Alabama for all the work
he has done on the budget. He worked on a budget for 2 years previous
to this which never materialized. I am so pleased he and his staff are
working on a budget.
I understand his disappointment. I am an accountant, and I hope
Senator Johnson, who is the other accountant in the Senate, will have
an opportunity to come to the floor and talk about some of the numbers
because there seems to be some discrepancies in the numbers. He has
tried to pin those down by asking questions of the staff and, as a
result, has come up with some demonstrations that show where the budget
we are currently talking about goes.
I wanted to just briefly share an article I ran across today. It is
called ``Mr. Penny vs. a dragon: Hey kids, it's the national debt!''
How are kids across America going to understand the debt? We are
having a lot of problems understanding it in this body. Washington's
budget squabbles and financial fights are enough to tangle up anyone's
head, so one can only imagine how it might confuse children. So enter
Mr. Penny and the Dragon of Domeville. Let's see, that would be the
dome? Yes.
This children's book by Lucile McConnell seeks to raise awareness of
fiscal irresponsibility and the national debt for those who are just
out of diapers. The book's hero, Mr. Penny, is introduced as ``quite an
individual and not a follower,'' and begins:
Once upon a penny, in the Land of Us''--
That would be U.S.--
in the little town of Meville, lived a little penny. In
fact, a whole lot of little pennies were scattered all over
the Land of Us, but our story is about one particular penny:
Mr. Penny. He was a singular fellow, quite an individual and
not a follower of the crowd.
The antagonist, a dragon--a black dragon--if this had been a western
story, it would be the guy with the
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black hat--a dragon designed to represent a bloated Federal Government
that will not stop growing and loves to eat currency.
In fact, he developed a taste for charred bills . . .
dollar bills. Within no time, the dragon had devoured $15
trillion--
You can tell the book is a little old, otherwise it would be $16.6
trillion, which is where we are now--
and was always looking around for more to consume.
Eventually, Mr. Penny scores a one-on-one with the dragon and does
his level best to convince the dragon just how reckless Federal waste
can be.
I don't think you know what effect you are having on the
whole land of Us by eating the money that we send to
Domeville. . . . Our schools are closing; our youngsters
can't go to college; our oldsters can't get medical help; our
businesses are failing because there is no money for loans;
our roads and bridges are falling down; our towns and
industries are not safe; our citizens do not have jobs; and
we are running out of money.
On the book's Web site, McConnell describes herself as ``a tax/
commercial transactions attorney'' practicing in Washington and New
York and says--and this is very important--all funds from the book--all
funds from the book--will go toward paying down the national debt.
In an author's note in the book, McConnell writes:
Our beloved Country is in trouble . . . big trouble. This
is the kind of trouble that cannot be solved unless we all
pitch in and come to the aid of our country immediately.
She adds:
My hope is that after reading this book, young people are
energized about the possibility of what we can accomplish
together through cooperation and teamwork.
So, Madam President, I had an amendment in the committee that would
have taken care of some of those charred bills and converted them to
metal coins--dollar coins. If we were to do that, it would probably
save about $1 billion. That maybe doesn't sound like much around here,
but $1 billion would be a good start and would put a little punctuation
in this book.
We are getting to the point where if we don't do something, we will
not have money to spend. If interest rates go up--and if people lose
confidence in our economy, the interest rates will go up--the only
thing we will be able to pay is interest. Doesn't that sound like
somebody who has used their credit card too much and can't afford to
pay the credit card down? Of course, we are not even worried about
paying the credit card down. We are not even talking about doing that.
We are not even talking about balancing the budget at this point, and
we need to do that or maybe we need to pass out copies of ``Mr. Penny
and the Dragon of Domeville.''
I yield the floor.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SESSIONS. Madam President, we talked about a number of challenges
our Nation faces and the debt course we are on. The Director of the
Congressional Budget Office, Mr. Elmendorf, testified just a few weeks
ago before our Budget Committee and declared that we remain on an
unsustainable financial course even after the Budget Control Act that
reduced spending and even after the tax increase in January, and that
this does not get us out of the danger zone.
We have hundreds of billions of dollars in deficits every year, and
he is projecting that interest on our debt in the 10th year will rise
to $800 billion, which is about what the score of the Murray budget
that is on the floor today would add to our debt.
Fundamentally, this budget that is before us today did not
change the debt course we are on. It does not have $2
trillion in spending reductions, and it leaves us on the same
dangerous course as Mr. Elmendorf said we are on, so we have
to get off of it.
I want to share a few things that drive home the danger we are in.
Now, we have a strong economy. We have a great entrepreneurial spirit.
We have a tremendous infrastructure compared to most places. We have a
rule of law that helps us tremendously in terms of managerial
efficiency and contracts and complex documents that can be entered
into. If there is a dispute over it, you can go to a Federal or State
court and have a pretty good chance of a fair decision being reached
even in the most complex matters involving high finance. That is not
true in most places in the world, so it gives us an advantage.
We have an educated workforce. We have a lot of people who are
willing to work and hustle. So we have some advantages. We have a
history of trade and freedom. But I want to show this chart, because we
may not be doing as well as we think we are, and the debt that we are
facing may be more serious than a lot of people will acknowledge.
This is a chart that shows the debt per person in the Eurozone
compared to the United States. It is a stunning chart. Some people have
explained it somewhat by saying, well, our economy in the United States
is bigger than other economies in the world. Therefore, individual
Americans normally make more money and, therefore, they can carry more
debt. But anybody who sees this chart has to begin to understand and
worry that the needle of our debt is in the red zone--the danger zone.
Look at this. This includes spending for Federal, State, and local
government. These are 2012 projections of general government
expenditures in nominally U.S. dollars--all converted to U.S. dollars
by the International Monetary Fund. This is not the United States. This
is the world's economic outlook according to the International Monetary
Fund. This is the way they score our debt compared to the rest of the
world in comparable U.S. dollars.
Look at this: In dollars, Spain's debt per person is $24,000. Spain
is in serious financial difficulty now. Its debt has caused the
interest on their debt to surge. They are paying a large amount. They
have tried to bring that under control, but their unemployment is high,
and the net result has been the economy is stagnating dangerously. It
is a sad thing.
Italy has more, with $26,000; Portugal, $39,000 per person; Greece,
$42,000 per person; but the debt per person in the United States,
according to the International Monetary Fund, is $53,400--higher than
all those countries.
I would say to my colleagues, we are not in a position of safety. I
would say to my colleagues that this is a kind of debtload that we need
not to underestimate. We might find that this economy is more
unpredictable than we think.
As I said last night, I remember Alan Greenspan being before the
Budget Committee in 2001 and telling us we had to worry. And the worry
was that we had so much money that we would pay down all the debt in
the United States and then--he worried--what we would do with the extra
money when we paid the whole debt down. This is the maestro, Alan
Greenspan.
I say that just to indicate that if he misses it that badly, maybe
Mr. Bernanke will miss it. Actually, the Wall Street Journal documented
that when Mr. Bernanke was advising Alan Greenspan, the Federal Reserve
Chairman, about the bank mortgage situation in the mid-2000s--2003,
2004, 2005--he was advising Mr. Greenspan to keep pouring the low money
out, keep encouraging banks to lend, lend, lend, and he rejected the
idea we were in danger. Then, whammo, we had this horrible recession of
2007.
So I would just say this chart shows us that we need to get our house
in order. The American people know that. They tell me that everywhere I
go. So why won't Congress respond?
Well, the House has responded. I know my Democratic friends don't
like to hear that, but this budget that Paul Ryan produced, while not a
perfect document, it changes the debt course of America. It balances
the budget, and we could do the same thing if we wanted to, and do it
in a different way. Let's do it a different way, but we should have a
balanced budget. And we don't, and there is no plan to get there--not
even close.
One of the things that is happening in America today is the growth in
our economy is not where it should be. This chart is a vivid indicator
that the Congressional Budget Office, our top adviser, has been
consistently wrong about its projections in the last several years.
This is CBO forecasts 2 years before an event. OK? So in 2008, what was
CBO projecting the growth rate to be in 2010?
They projected it would be 3.1 percent, but it came in at 2.4
percent. In 2009, what did they project we would have as growth in
2011? They projected we would have 4 percent growth in 2011.
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We had less than half of that--1.8 percent. That is a huge difference.
Now Christina Romer, who served President Obama as his top adviser on
economic matters, has estimated that the difference in 1 and 2 percent
growth is 1 million jobs. So what do we have here? We have more than 2
million less jobs being created in 2011 than were projected by the
experts that we relied on in 2009.
And look at this. It is even worse in 2012. They projected back in
2010 that growth in 2012--just 2 years in advance--would be at 4.4
percent, and it came in at 2.2 percent. So these 1.8 and 2.2 percent
growth figures are really not growth. That is not a job-creating
factor. You need to have more growth than that to create real jobs and
hiring and wage improvements and raises.
So I just would ask my colleagues: What is causing that? What is
causing that? Professors Rogoff and Reinhart did the fabulous book,
``This Time It's Different,'' and they did an empirical actual study of
the economies of over 200 years of nations who ran up too much debt.
They studied what happened and the ones that had debt crises. What
did they conclude? And not based on theory, not some ideal formula
reached in academic situations, but what actually happened in these
countries? What they concluded was that when the gross debt exceeds 90
percent of GDP, 90 percent of the size of the economy, then growth
begins to slow. They found that the growth was slowed by 1 to 2
percent.
In 2010, the gross debt of the United States exceeded 90 percent of
the economy and CBO's forecast was off. The next year, we were still
way above 90 percent. In 2012, we were way above 90 percent of GDP. The
debt is so high that it impacts economic growth, it would appear to me.
I think this is a fact not being fully considered by CBO and it is
impacting our economy, and it argues against any idea that we have no
responsibility to start confronting our debt situation now.
In addition to Rogoff and Reinhart--perhaps stimulated by Rogoff and
Reinhart, in the last couple of years, the International Monetary Fund,
the European Central Bank, and the Bank for International Settlements
have studied these very issues because it is a big deal in Europe. Many
of the countries in Europe are deeply in debt, their economies are
stagnating, and they have studied this issue. And what did they
conclude? They concluded basically the same thing. Every one of those
studies shows that when a country reaches a high level of debt--in the
range of the 90 percent--they begin to suffer economic growth
reduction. One of the studies went as low as 60 percent of your GDP in
debt begins to slow the economy.
They have various factors in how it is done and the studies are
constructed in different ways, but the net result is that when our debt
situation is applied to each of those three studies, our economy is
projected to be suffering as a result of the high debt we have. So I
would say those three studies validate the concerns of Rogoff and
Reinhart. Those three studies indicate we are already in America
suffering growth loss because of the debt we have.
As we wrestle with how to deal with our economy, I would challenge
all of our Members and challenge commentators in the media to ask tough
questions: Can we continue to borrow more, run up more debt, and
attempt to create a stimulus effect in our economy today? How much can
we do that?
The Congressional Budget Office early this year concluded in a
thorough report that if we were to balance the budget and bring our
debt down to the level--as Congressman Ryan proposed and as we proposed
in the committee, and as I proposed in my amendment tonight--and
balanced the budget, what would happen? They predict this economy in 10
years would be stronger than it is if we hadn't done that, if we used
two other scenarios that had less reduction and allowed more debt to
accumulate.
Did you hear that? The economy over the long term will be healthier
in this country, according to our own CBO, if we get our debt under
control and balance our budget. It is in their report in January of
this year. We need to listen to that. The American people know you
can't get something for nothing. They know you can't borrow your way
out of debt. As one of my citizens in Evergreen told me several years
ago at a town meeting, My daddy said you can't borrow your way out of
debt. Isn't that true? That is what we have been doing. We are going to
borrow somehow and create a false high, a sugar high, and that is going
to fix our problems. It has proven not to be the case.
What do we need to do? We need to do the same thing responsible
people all over the world do. We need to do the same thing families do,
the same thing States do that are well managed--and many are very well
managed--and that counties and cities do; that is, operate within our
means. Let's have a budget that actually balances, and all of the other
factors will come into play. Debt as a percentage of GDP and these
arguments about primary debt, and debt as a percentage of the economy,
that is not where we need to be.
If we balance the budget over a period of time--carefully, so it
doesn't do damage to the economy--and do this in the right way, we will
make this economy better, and we will have people working who are now
on unemployment. We will have people working and bringing home
paychecks who are now on food stamps and TANF and other welfare
programs. They will have jobs and they will be able to get pay raises
and they will be able to work longer hours and get some overtime, and
be able to pay down the house payment or the car payment. People are
hurting out there. We have fewer people working today than we did in
2000. The average wage has declined--not increased--in the last 10
years. This economy is not growing. My Democratic colleagues are
correct about that. People are hurting.
So how do you fix it? Do you borrow more so we can spend more? Is the
government going to lift people out of poverty by giving them more
checks that we taxed more and passed out more money? Is that
compassion? I don't think so.
I have worked with working people. I have worked construction. I grew
up in the country. I know people who didn't have money and how they can
live and take care of their families on modest means, and they were
independent, with pride and self-respect. We have an award being given
in North Carolina to a food stamp office employee who talked people
into taking food stamps who said they didn't need them. The award was
given to her for overcoming mountain pride. So is this the status of
the American economy today, that we are talking people into not being
independent, we encourage them to take benefits from the government
when they say they don't need them? That is what they gave her the
award for.
We have got food stamp promoters in foreign embassies, in the
consulate offices all over. They are meeting and promoting new
residents to America--legal, presumably--to get on food stamps and
other benefits programs. But you are not supposed to be admitted to the
United States if you are going to be a charge on the State, so we
checked on that. Do you know what we found? That about two-tenths of 1
percent--not 1 percent, but two-tenths of 1 percent of the people who
apply to enter the United States are turned down because they might not
be financially able to support themselves. One study said at least 36
percent of lawful immigrants in our country today are on some sort of
welfare benefit program.
If they have to have health care to survive and go to the hospital,
they need to get it, and we want to help people who are in need. But
doesn't anybody follow common sense? Doesn't anybody understand we have
a reasonable law that says, If you are going to come to America, we
need to know you are going to be able to take care of yourself? You
shouldn't be coming to America to get on a benefit program. We are not
checking. Nobody is checking. Nobody is worried.
So what will they do? They will get Uncle Sam to ask the taxpayers to
send more money, and we will keep spending more. It is a bottomless
pit, you know. We will just tax the rich. How about that? Because
shouldn't the rich pay more because somebody immigrated to America and
their income was low? And so we will just give them money.
Do you know they did the same thing, the Department of Agriculture,
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with people who entered the country? They had a soap opera series of
videos, and this is what they did: A lady speaks to another lady and
she says something about food stamps. The other lady says, Well, my
husband has a good job. I don't need food stamps. That is the first
scene. The first lady says, Well, you don't understand.
After two or three of these videos, the first lady convinces the
second lady that she should ask for these benefits when she said she
didn't want them. She was a lady of pride and dignity. She didn't think
she had to have this and wasn't asking for it. But our government
overcame her resistance. The U.S. Department of Agriculture was
promoting this and paid money to buy these ads: Don't worry, we will
ask the American people to send more money. But we won't ask you to
send more, we will ask the rich to send more money.
I remember years ago George Wallace used to want to tax the power
company. He always wanted to tax the power companies. I was looking at
my electric bill the other day and they list your charges, and one of
them is the State tax. So they taxed the power company, and the power
company passes it on to the person who buys the electricity. Give me a
break. A tax on the economy is a tax on the economy. It is a weak
argument that you can have an unlimited amount of money by taxing the
rich. At some point it becomes not correct, not fair, and not right if
the money is being thrown away on Solyndras and A-123 battery companies
that go bankrupt. But nobody worries about it: Send more money.
We are having abuses in the SNAP program, and I proposed an amendment
that would eliminate an abusive part of the food stamp program a year
ago. In 2001, we spent $20 billion a year on SNAP. Last year, we spent
$80 billion. It has gone up, from 20 to 80, four times. We identified a
categorical eligibility gimmick that was allowing people to get food
stamps who did not qualify and should not have received them. I said,
Let's close that loophole. Over 10 years we were projected to spend
$800 billion on the food stamp program. This would have reduced it by
11, so we would have been spending $789 billion instead of $800
billion. And do you know what they said? Sessions wants to take food
out of the mouths of babies. People are going to starve. He is
uncompassionate. He is unkind. He wants to chop the budget so we can
hurt people. It was voted down. And we had reports showing that this
was an abusive practice that should have been fixed.
Now we want to ask the American people, Send more money. We want to
tax you more. Well, what about the abuse in the food stamp program?
There is no abuse. The Department of Agriculture said we have less
fraud than we have ever had in history. And I used to prosecute that as
a Federal prosecutor. I know there is fraud in there. We established
without any doubt that their claim that they have minimal fraud is only
in the computer part of the program.
Nobody is checking to see if somebody who qualified for any of these
government programs later gets a job and doesn't meet the
qualifications. They still are getting benefits all over the country,
unless they self-report. All kinds of things such as this are going on.
No one is checking to see if somebody goes into two food stamp offices,
two other benefit offices of various kinds and asks for them under
different names at each place and produces some sort of ID. There is
all kinds of abuse in this system and I hear it all the time.
Most people who get food stamps need it, they qualify for it, and
they would get it under any kind of reasonable reform that would occur.
But to suggest that we aren't wasting money through practices that
allow unqualified individuals to gain access to multiple programs of
this kind is a mistake. It absolutely happens every day.
I tried cases to a jury of stores selling food stamps, manipulating
the program, dealing with corrupt individuals who brought the food
stamps in to sell because they had obtained them fraudulently and never
needed the food at all. This idea that there is no fraud in this
program is ludicrous. That is what the leaders of the Department of
Agriculture are saying: We have no problem. It is OK. Just send us more
money. We will keep expanding and growing every year--maybe double the
thing again, I guess.
These are the kinds of things that I believe this budget does not
address. This budget allows spending to continue at its current rate,
it allows the debt to continue at its current rate. Spending goes up
and taxes go up. That is what this budget does. Spending goes up and
taxes go up and the deficit is not reduced.
I hope that somehow we will come to our senses, go back home, and
talk to our constituents. We will listen to them when they plead with
us to do something about the debt course we are on. They tell us they
are disgusted with the way things are going in Washington, and we say:
We cannot do anything about it. They said there is not a problem. You
don't understand the challenge we face. We really have to have more
money. That is what we have to have. We can't get by on the money we
have been having. We have to increase the money you give us.
Do you know that if we increase spending every year 3.4 percent--and
these figures are not disputed--if we increase spending each year 3.4
percent, we could balance the budget? The problem is that our spending
is increasing at 5.4 percent. It is hard to believe that difference
would cause as many billion dollars in debt as it does, but it does.
Each year, we add hundreds of billions of dollars to the debt. In fact,
the last 4 years we have averaged adding $1,100 billion to the debt
each year. As those dollars are added to the debt, we pay interest on
them, and interest is surging.
We are going to find, according to the CBO, on the course we are on
and on the course we would stay on if this budget passes, that we would
not do anything different than where we are today, which means we would
be paying about $800 billion in 1 year in interest. The road bill is
$40 billion, education is about $100 billion--it is going to crowd out
spending for every agency in our government. For research and
development--we are just going to keep raising taxes now?
When we talk about a $650 billion tax increase in January this year
on the rich, that passed. That went through. That will be $65 billion a
year in extra revenue. I am saying to you that the Congressional Budget
Office tells us that in 10 years from now, we will be paying $800
billion a year in interest. You are not going to tax the rich out of
that. It is just not going to happen.
We are at a point where the debate today and the last week in the
Budget Committee has put us in a position to confront the choices we
have. Forgive me if I am passionate about this. We have waited 4 years
to even see a budget brought to the floor when the law of the United
States of America says a budget should be brought every year to the
floor and every year before the committee and the President is required
to produce a budget every year. For the first time since the Budget Act
has been passed, the President has not produced a budget this year. But
the Senate has begun to act, so I guess we are supposed to be happy for
that. And I am happy for that, but I think we would be a lot better
off, the country would be a lot better off--we may be in a better
position to reach some sort of compromise on some of the great issues
had we been publicly wrestling with these issues for the last 4 years
instead of sweeping them under the table.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant bill clerk proceeded to call the roll.
Mr. MERKLEY. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________